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The JOBS Act Epic Fail

Krapfel thinks the market is at fault, not the JOBS Act.

"Equity market performance and volatility are the primary drivers for IPO activity, and concerns about the fiscal cliff constrained the number of companies going public in the back half of 2012," Krapfel said. "The worst of the fiscal cliff fears are behind us, along with a strong start to the equity markets in 2013, suggests that IPO activity should be strong through at least the first quarter."

Seven offerings have been priced so far in January 2013 and the results are mixed with three down and four up. The total return from the issue price for the group though is 11.61% according to IPO Scoop.com. Last January, 17 companies went public.

"I don't buy that it has slowed the market down," said Fitzgibbon. "You get a good stock market you get a good IPO market."

He does, however believe the JOBS Act didn't help IPOs. "The only thing the JOBs Act did was change the timing." Since companies can file confidentially and have everything ready to go, they tend to wait for the market to be on an uptrend before going public. They wait for the right moment and jump in.

Renaissance Capital agrees and in its recent 2012 annual review wrote, "The JOBS Act , which was touted as a way of opening the IPO Market to small growth companies, has had no noticeable effects other than reducing the minimum time from filing to pricing." They go on to say, "We are less optimistic that the JOBS Act in and of itself will solve some of the issues facing the US IPO market."

Of course, some people may say that the increase in public companies is happening on the small side of the equation in the crowd funding arena. Unfortunately, there is no tracking of these "offerings" at the SEC or anywhere else. IPO Village says it may have its first company to go public soon and expects a 15% to 17% growth in Nasdaq IPOs in 2013 and attributes that to the JOBS Act.

It seems the only people that believe the JOBS Act has or will work are the people that stand to make money from it. The people that have been following IPOs for years seem less impressed.

--Written by Debra Borchardt in New York.



To contact the writer of this article, click here: Debra Borchardt.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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