The Federal Reserve Chairman has announced intentions to hold interest rates low for the foreseeable future, thus depressing any potential accretion of equity capital gains expectations in the near-term window for private placement offerings and crowdfunding offerings of up to $75 million.
Capital Raises Look Like A Safe Bet
The Fed policy mandate may open the door for many small and medium-sized companies to leap-frog timelines and become initial public offering candidates over the near-term window. Obviously, Wall Street is thrilled at the prospect of still more equity issues coming into the public markets. The key is timing.
Timing of Many Key Issues Critical to Interest Rates
The reduction of the COVID pandemic down to a dull roar, the regulatory nation changes being restrained in their impact on issuers, and the resolution of corporate tax policy will all be key considerations that may impact capital formation growth (or reduction) by the end of the year. Each of these issues has the potential to result in hyperinflation that would require drastic interest rate policy changes, thus curbing capital formation growth – the key to economic growth in a market economy.
In the meantime, it appears the onus is on issuers to decide if the capital resources they now have available are going to be sufficient and efficient for the market opportunities they can reasonably expect to address. For those with questions, the timing appears to be favorable to enter the capital markets immediately via both registered and registration-exempt securities offerings.