Law360 Quotes Spencer Feldman on Small IPOs Challenging Current Market Trends
Olshan Corporate Partner Spencer Feldman was quoted in Tom Zanki’s August 25, 2022 article, “Small IPOs Buck Trends In An Otherwise Cold Market,” in Law 360 (subscription required). The article details the recent success of smaller initial public offerings. Feldman stated, “this is definitely a phenomenon.” The article highlights several factors that have enabled smaller deals to be completed. For smaller issuers, many have invested months if not more than a year to go public. Feldman said that smaller companies conduct pre-IPO bridge financings that are predicated on going public and “with time and expense invested to date, and the fact that public companies get a premium in value to private companies, they are still pushing ahead.” For underwriters, Feldman said, the smaller investment banks are not afraid of macroeconomic-related volatility and will price an IPO in challenging markets. These bankers generally move faster than the larger firms. The larger underwriters attract institutional investors, but for now those investors generally favor less risky asset classes. For retail investors, they still have an appetite for smaller IPOs. Trading volatility is a concern, but smaller IPOs come with smaller public float, with less likely shorting, plus, they often get warrants.