By Eddie Tobler, Managing General Partner at West Coast Stock Transfer Corp
Musings from the Appalachian mountains.
As a new contributor to DWN, I feel it is only fair to note that nuance is one of my specialties. Hopefully I can provide you with insights outside of the scope of what you normally see here, and perhaps bring you into the undertow that is seldom seen outside of the back offices of firms.
The Private Markets Pontiff – Chairman Atkins
Since taking the helm at the SEC in April of 2025 there has been not a flurry, but a blizzard of changes, proposals and statements pushed forth. On a broad level it appears as if the Chairman is trying to provide some much needed remediation to the dumpster fire that was the Gensler era, however perhaps there is a more poignant desire here than we understand.
Over the past fourteen years or so since the JOBS Act there has been an ever increasing utilization of those methods to fund small companies which are not publicly traded and may never be. While there are currently many Issuers in the markets which are still using these methods, mostly their use is with the smaller private markets. This is typically due to the size of the offering that can be conducted annually, for many Issuers the $75 Million amount is not sufficient for their needs.
For those Issuers which do find these kinds of offerings a fit there are very reasonable ongoing disclosure requirements. For most Issuers there is only a necessity to file a 1-K and a 1-SA annually to remain compliant with the Reg A (Tier II) rules. This is in direct opposition to what we see with Issuers which have a ’34 Act requirement, those at a minimum will have 4+ filings annually required with the onerous inclusion of Inline XBRL and various other filings that must be made from time to time.
“Quarterly Disclosures? That’s nonsense!” – Probably the Chairman
What if though there is some method to the madness we are seeing put forth? Over the past roughly thirty years the public markets have contracted around 40% in that time frame. Why is that important? Diverse capital markets with democratized access to capital is a sign of a healthy public company ecosystem. Due to the many modernizations of regulations over the years the pathway to the public markets is a veritable logjam of compliance hoops to jump through.
Do we really believe that’s for the best though? Throughout my years in the capital markets I’ve noticed that it is significantly more difficult to find a good small company to invest in. In addition to that it is for sure a difficult process to attract investors and maintain a healthy trading market as a public entity. This also results in the current public entities having all of the capital in the market directed at them. Which is why in many places we have bloated valuations, absurd trading volumes and extraordinary volatility.
In addition to those aforementioned “problems” we have the rise of alternative asset classes that are liquidity centric. If I were to hazard a guess I would believe that some of these classes of investments may have arisen due to the appetite of the public for items which are tradable and have public exposure. I’m not sure that for the anyone this is a good idea. Perhaps too they would be less attractive in light of other, perhaps better options in the form of publicly trading company’s.
For that reason I would say carry on good sir to Chairman Atkins. Let’s expand the universe of publicly traded companies by making the entry points more tenable and less expensive.
Disclosure: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of West Coat Stock Transfer Corp. or any of their respective affiliates. This article is provided for general informational and educational purposes only and does not constitute investment advice, a recommendation, an offer to sell, or a solicitation of an offer to buy any security, financial product, or investment strategy. The information presented is believed to be reliable but is not guaranteed as to its accuracy, completeness, or timeliness. Any forward-looking statements or opinions are subject to change without notice.
Author Bio: Eddie Tobler is an issuer and shareholder focused professional with over a decade of experience in Corporate Actions, governance and shareholder communications. Specializing in Community and Regional Banking with an emphasis on banks transitioning to the public markets, as well as those involved in M&A activity.
