Dr. Seuss is currently the most widely read author in my house, so please forgive
the literary allusion. . . .
SOX is conventionally blamed for driving IPOs overseas. Apparently, higher underwriting fees and greater underpricing may also be to blame. Daniel Gross at Slate cites a study by Oxera--a European economics consulting firm--which suggests that these IPO costs are generally higher in the US than in London. Alan Murray also comments in WSJ. The report was commissioned by the London Stock Exchange and so must be taken with a big grain of salt.
In any event, as the world gets smaller and capital markets integrate, Gross reminds that IPOs are becoming a commodity, where even small pricing differences may matter. Higher fees and more regulation. Is the US becoming (as Gross suggests) the Europe of capital formation?
Points for anyone without preschool children who can identify the literary allusion in the title. . . .
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