Recently, the Securities and Exchange Commission’s Division of Corporation Finance issued a sample comment letter that provides guidance to issuers raising capital and that have volatile securities.  The sample comment letter identifies a number of areas of risks that issuers and their advisers should consider under these circumstances, which would include periods during which there have been significant run-ups in the stock price, divergences in valuation ratios relative to those seen during traditional markets, high short interest, reported short squeezes, or reports of strong or atypical retail investor interest.  Under such circumstances, an issuer should consider the sample comments raised in the letter, which, the Division notes, is not an exhaustive list, and tailor the disclosures to the issuer and the offering.  For issuers that already have an effective shelf registration statement, the sample letter may provide a useful roadmap for disclosures to include in a prospectus supplement for a shelf takedown.

See the sample letter here.

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here