134-Year Old Soccer Club Takes Advantage Of So-Called ‘JOBS Act’ To Go Public As An ‘Emerging’ Company
"134-Year Old Soccer Club Takes Advantage Of So-Called ‘JOBS Act’ To Go Public As An ‘Emerging’ Company"
The globally popular English soccer club Manchester United made its initial public offering on Friday, and has been trading essentially flat since then. As ThinkProgress noted, Manchester United’s IPO highlighted the absurdity of the so-called JOBS Act — championed by Congressional Republicans and signed by President Obama in April — which allowed the club to avoid a host of securities laws and disclosures.
For instance, under the law, the 134-year old club was allowed to file as an “emerging” company, as Ed Mierzwinski of U.S. PIRG wrote:
The venerable English football club Manchester United, founded in 1878, is expected to file an IPO today under a new deregulatory U.S. law, the so-called JOBS Act of 2012, that passed overwhelmingly despite opposition from U.S. PIRG and other investor protection organizations, because it was supposedly intended to help newer, smaller, “emerging” companies go public without dealing with pesky securities law requirements designed to deter fraud and chicanery.
As Marketwatch noted, calling United is an “emerging” company is a “questionable concept for the operator of an 134-year-old football club.” The offering raised $234 million for the club, valuing it at more than $2 billion.
And the club is far from the only entity gaming the JOBS Act. The misnamed law has already allowed significant financial shenanigans, as shell companies with no employees are popping up and filing as “emerging,” giving bigger businesses a way to take advantage of the law’s lax disclosure provisions.
“The Glazers [Manchester United’s owners] have really shielded this operating company from investors, so the confidential nature of the IPO is particularly concerning in this case,” Francis Gaskins, President of IPO Desktop, told CNN Money. “They’re the poster child for what’s wrong with this law.”