Tuesday, November 27, 2007

Europe Wins Another

From high fashion to high tech, businesses continue to find America's public securities markets to be a very expensive place to do business. This week brings news that Tommy Hilfiger Corp., which left the New York Stock Exchange to go private in 2006, may go public again, this time on the Amsterdam exchange. Since both exchanges are now part of the combined NYSE Euronext, you might say this is a vindication of new Merrill CEO John Thain's strategy when he led the NYSE. But it's also another warning about the competition facing American capital markets.

Kate Mitchell of Scale Venture Partners says that even start-up companies are spending up to $3 million per year to comply with Sarbanes-Oxley in preparation for going public. "We're at the point of overkill," she notes, adding that regulation has changed the message her companies hear from investment banks. "When we get pitches for IPOs, they always bring into the mix European exchanges, Asian exchanges, even the Canadian exchanges . . . Five or 10 years ago, we never heard that."

Europe Wins Another

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