This article's focus is the idea that the transition between private- and public company status could be less bumpy if we unify the public–private dividing line under the Securities Act and Exchange Act. Part II of this article outlines the current public–private dividing lines under the Securities Act and the Exchange Act. This part also explores Facebook’s recent transition from private to public status under that framework, as well as Congress’s recent intervention in the field with the JOBS Act. Part III explores the problems of making the transition from private to public, focusing on IPOs and their role in capital allocation. This part uses Facebook’s IPO as both an illustration and as a cautionary tale. Part IV sketches an alternative to the current regulatory framework based on the two-tier-market proposal summarized above. Part V concludes.
A. C. Pritchard, Revisiting “Truth in Securities” Revisited: Abolishing IPOs and Harnessing Private Markets in the Public Good, 36 SEATTLE U. L. REV. 999 (2013).
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