It’s that time of year when our friends over at Audit Analytics begin to roll out their quarterly reports on initial public offerings and auditor market share. The research firm’s first quarter analysis is out, and there was a four-way tie for most IPOs audited in Q1—and it wasn’t a Big 4 sweep. But before […]
Our friends at Audit Analytics just released their analysis of the initial public offering auditor market share for the fourth quarter of 2019. But before we look at Q4’s results, let’s quickly review the previous three quarters’ IPO audit engagement leaders: Q1: Marcum 8 ($896 million raised) Q2: Deloitte 17 ($7.87 billion raised) Q3: EY […]
The firm that puts the EY in cringEworthY training seminars for women audited the most initial public offerings in the third quarter, according to a new analysis from Audit Analytics. #Auditor Market Share for 53 #IPO companies in Q3 2019: EY: [20.8%];Marcum: [13.2%];Deloitte: [11.3%];PwC: [11.3%];KPMG: [11.3%];All Others: [32.1%] — Audit Analytics (@AuditAnalytics) October 10, 2019 […]
After a reeeeal slow start to 2019 due to the government shutdown, initial public offerings picked up the pace in the second quarter, nearly doubling the number of IPOs in the first quarter and including two of the top 10 largest IPOs since 2000. An Audit Analytics analysis revealed that between April 1 and June […]
2019 is supposed to be a record-breaking year for initial public offerings. At least that’s what the experts have been telling everyone. Barrett Daniels, Deloitte’s national IPO services leader, said the IPO market in 2019 “could end up being historic,” while Jackie Kelley, EY Americas IPO leader, said “this is going to be the best […]
Avalara’s initial public offering set the New York Stock Exchange ablaze in a sea of orange on June 15, as the Seattle-based sales tax automation company’s shares nearly doubled in their opening day of trading, according to CNBC. But while Avalara’s IPO looks hot, it’s overpriced, some analysts say. Shares of Avalara closed up 87 […]
Well, looky there, Sarbanes-Oxley requirements. In a perfect world, a private company that is planning to go public would take 12 to 24 months before the initial public offering launch date to make sure all of its i’s are dotted and t’s are crossed. But the world we live in ain’t perfect, and certain factors […]
During the interview process for the job of corporate controller at Borderfree Inc., Scott Paterniani, CPA, was told by the company’s CFO, Ed Neumann, that he was focused on operations, scaling the business, and other strategic initiatives, and he needed someone with recent experience with an initial public offering and the Securities and Exchange Commission […]
So far, 2018 has been a damn good year for IPOs in the United States. The U.S. IPO market is coming off a first quarter in which 44 companies, including Dropbox, went public, raising about $15.6 billion—the best quarter by proceeds in three years, according to a March analysis by research firm Renaissance Capital. That […]
Anyone who has ever struggled through Intermediate or scored two consecutive 74s on FAR can tell you accounting is hard, man. But when you're in the financial business and hoping to go public, there is a minimum expectation that you at least have some idea what you're doing before you invite the auditors over to […]
So textbook rental company Chegg went public today. And here's sort of what happened… Chegg priced their IPO at $12.50 a share, which exceeded expectations. Here's what you really need to know though: Chegg said it earned $22.7 million in adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, for the nine months that […]
We're sure some of you know who the firm is already, but there's nothing out there yet so we'll refrain from calling it official. But! Audit Analytics has some stats on the 248 IPOs since April 2012 that show EY is a big favorite among EGCs since the JOBS Act was passed: Since April 2012, […]
Remember this chart from last month? #CPA link: Mo' Money, Mo' Problems: Faulty Big Four audits climb (along with their fees) http://t.co/M57S1ovtX9 pic.twitter.com/4wHa1xmQ9h — Rick Telberg (@CPA_Trendlines) August 15, 2013 Yep, the one where EY!'s deficient audits blast off like rockets into Syria. It's the kind of info that doesn't make any of the new EY! […]
Recently, some high profile companies have been going public. Leading up to the big day, all kinds of people get ants in their pants because, contrary to what some of you believe, going public is AWESOME. There are roadshows, CNBC hype, and typically you get to ring a bell. Pretty sweet. Unfortunately, there are all […]
Cripes, this Facebook IPO thing has people going bonkers so we figured digging up a little relevant information for you all was in order. Most of you probably knew that Ernst & Young was the auditor of Zuckerberg's playland but you probably aren't yet clued in to the members of the audit committee that E&Y […]
Fun fact: yours truly used to be a hardcore Yelper, ranked San Francisco’s funniest Yelper for a good year and a half before I gave up and quit the site. God that makes me feel like a loser. As it should.
Anyway, here’s my issue with a Yelp IPO… Yelp should have quit way back when I did. The window of opportunity, in my mind, has long passed. Maybe in 2007 Yelp had a chance to blow it up but how are they even relevant anymore? Beyond the rabid fan base and drive-by Googlers, I’d say no. They blew a Google deal. They totally bit off the foursquare formula when they should have come up with it first. They still don’t have a money-making plan, as far as we can tell.
So here’s the really crazy part: according to DealBook, Yelp has brought on Goldman Sachs and Citigroup to help with its IPO. Did Jeremy S. suffer from brain-eating food poisoning?!
The offering, which is expected to value the company at $1.5 billion to $2 billion, will probably come to market in the first quarter of next year, a person close to the company said. Yelp is expected to file its prospectus by the end of this year.
In recent months, Yelp has openly telegraphed its intention to go public. At a technology conference during the summer, Yelp’s chief executive, Jeremy Stoppelman, said the company was still pursuing an I.P.O. but did not have a set time line. In late July, in a move that many interpreted as another step toward the public markets, the company hired a chief financial officer, Rob Krolik, who helped Shopping.com go public in 2004.
Just last year, Stoppelman said Yelp likely wouldn’t go public for years, while it took $25 million in funding from Bono’s Elevation Partners. Remember, Elevation Partners also bought a 25% stake in Palm – anyone remember them? Anyway, earlier this year, Stoppleman proudly declined additional financing and announced that “an IPO is back on the table” for Yelp.
Fun fact: GS and Citi also worked on Groupon’s IPO, with Goldman serving as one of the lead underwriters.
But Yelp is no Groupon (that might be a good thing). The seven-year-old start-up has yet to prove how it can make money, outside of shaking down companies and forcing them into sponsorships. Oops, did I say that out loud? I meant through “advertising” revenue from sponsoring companies interesting in “creatively shuffling” their negative reviews.
The sad part is Yelp has an extensive team of writers in its users, and they are constantly creating free content (some of them are not too shabby, either) yet it still cannot figure out how to make money off that. What on Earth is an IPO going to change about that?
Barbara Roper wrote a commentary piece in WaPo Capital Business over the weekend that suggests the unthinkable: softening hard ass SOX rules for IPOs could actually kill jobs. How is that possible? Aren’t IPOs great for the economy?
Well, not always. Case in point: Groupon. Healthy, financially strong businesses are good for the economy. Scams, frauds or even overambitious accounting tricks might temporarily get the economy’s spirits up like a few rails of coke but eventually reality sets in and the economy is left broken and penniless in the alley looking for its next hit.
The report is an effort on the part of the Obama crew, who surveyed 27 business executives (including AOL’s Steve Case… and we know how his business turned out) for ideas on how to get the economy moving again. Among the suggestions, the report recommends Congress make compliance with all or part of Sarbanes-Oxley voluntary for public companies with market valuations up to $1 billion or, alternatively, exempt all companies from SOX compliance for five years after they go public.
The report blames burdensome SOX rules for the sharp drop in small IPOs in recent years, writing:
In the aftermath of the dot-com bubble and unintended consequences stemming from the Spitzer Decree and Sarbanes-Oxley regulations, the number of IPOs in the United States has fallen significantly. This is especially true for smaller companies aspiring to go public. As noted earlier, the share of IPOs that were smaller than $50 million fell from 80% in the 1990s to 20% in the 2000s. Well-intentioned regulations aimed at protecting the public from the misrepresentations of a small number of large companies have unintentionally placed significant burdens on the large number of smaller companies.
That would totally work as a justification except the SEC already debunked this silly idea. In a report earlier this year recommending no new 404(b) exemptions, SEC analysis showed that the United States has not lost U.S.-based companies filing IPOs to foreign markets for the range of issuers that would likely be in the $75-$250 million public float range after the IPO. “While U.S. markets’ share of world-wide IPOs raising $75-$250 million has declined over the past five years, there is no conclusive evidence from the study linking the requirements of Section 404(b) to IPO activity,” the report stated.
And as we all know, companies under $75 million haven’t had to worry about the SOX burden at all thanks to Congressional intervention. So how could it be that the burden they haven’t had has somehow prevented them from going public?
New boogeyman, please. I’m no huge fan of SOX but you’re going to have to come up with something better than this to convince me it’s a good idea to can it.
Maybe! The Wall St. Journal reports that the “site isn’t cancelling its initial public offering […] but is reassessing the timing for an IPO on a week by week basis,” because some people have gotten spooked by this big, scary economy. Okay, things are actually pretty frightening out there but Bloomberg’s sources say that the company also “needs time to address regulators’ questions, including possible revisions to a controversial accounting method used in its filing.” But all this – or insolvency, for that matter – isn’t any cause for concern since this just like a couple postponing a wedding. They just need more time. [WSJ, Bloomberg]
Chris Liddell is thinking about the future!
“I’m not worried about today, I’m worried about the three months and the six months and the nine months” from now, GM Chief Financial Officer Chris Liddell said in an interview this morning on CNBC.
Liddell also had some frank talk about how GM can never go back to the bad, old days, when he said GM was a financing company with a car company “attached,” and the auto maker used its pension plan as a “piggy bank.” GM needs to have a “fortress” balance sheet to support its business plan, Liddell said.
So the intention is there but old habits die hard, amiright? Francine McKenna thinks so and makes a prediction:
My prediction: GM needs another accounting restatement before the 2012 election. This time it shouldn’t be retail investors who end up with the short end of this stick.
Any takers? November 6, 2012 is the over/under. We’ll take the overs (post-election day) and if we lose, we’ll take FM to dinner at the restaurant of her choosing.
Back with another edition of “Accounting Career Couch” a undergrad senior wants to hear about some experiences the working stiffs of accounting world have had with initial public offerings.
Need advice on your next career move? Want to educate some rubes without coming off like a total jerk? Looking for a way to broach your co-workers body odor problem while not making it too personal? Email us at email@example.com and we’ll help you let everyone done gently.
Meanwhile, back on campus:
I am an undergraduate senior, and I have a presenta Special Financial Reporting Topics course. My group chose “The Role of a CPA in an IPO”, and I was wondering if this topic has been discussed on your site before, if not, could you make a post so I can gather related information, issues, success/failure stories, and personal experiences in order to complement my research? It seems this topic does not get a lot of coverage, and I believe it would be interesting and beneficial to all your readers.
To our recollection, this is a topic that has not been discussed on GC, so our reader’s inquiry makes for a good jumping off point.
Form S-1 outlines (check out the gory details below) everything a company needs to submit in order to register its securities and there are plenty of ways a CPA can assist a smooth and pleasant experience.
If you’re client has less than $25 million in revenues and isn’t registering more than $10 million in securities, Form SB-1 can be used in lieu of the big boy.
Generally, when a company files its S-1, the SEC usually has lots of questions about the financial statements and the accompanying information. The back and forth can be grueling and if your client isn’t organized or financially savvy the temptation to strangle someone and everyone can be high. But hey, if you manage to stick it out with them to the filing date, there’s usually a pretty good party and your client should be grateful for your service.
So at our reader’s request, anyone with recent (or not so recent) experience working on IPOs is invited to share their war stories – the good, the bad, etc.
GM’s balance sheet draws praise ahead of IPO [MarketWatch]
“Peter Bible, partner-in-charge at accounting firm EisnerAmper LLP, said General Motors is now carrying a much stronger balance sheet than its predecessor, based on the company’s initial public offering filed late Wednesday. ‘Their debt-to-equity ratio looks handsome,’ Bible said in an interview. ‘This thing has gotten restructured quite a bit. GM’s health care liabilities have fallen significantly. As I look at the balance sheet, it is much healthier.’ ”