Market Structure’s Effect on IPO’s

We have made the argument in the past that our “evolved” market structure, with for-profit exchanges making their money on co-location and tape revenue, and not listings, is not conducive to public capital formation, specifically in the small cap arena. There are just no economics to support the IPO’s in the aftermarket. David Weild, former Vice Chairman of  NASDAQ, has made the argument more eloquently, of course, on numerous occasions.

This chart, on SEC Watch Company Blog, shows the void, and shows it during a period when one would think IPO’s would have picked up (rising stock market, improving economy, and a tendency to have many deals occur around inflection points in economic cycles). See here:

http://blog.secwatch.com/

Something must be going on, no?