SUSIE GHARIB: Here at the big board, a lot of enthusiasm today for Yelp. Executives of the consumer review website rang the opening bell, as Yelp sold shares to the public for the first time. The stock skyrocketed 64 percent closing at $24.58, well above its offering price of $15.
GHARIB: Our next guest says the U.S. economy needs more success stories like Yelp, but he says there’s been a stunning decline in companies going public and this hurts American competitiveness. He’s Jack Markell, governor of Delaware.
GOV. JACK MARKELL, (D) DELAWARE: There’s a direct linkage between
IPOs and jobs. And there’s a lot of research that shows one of the most
important times in terms of the creation of jobs for any company is after
they go public. So a lot of companies are deciding that because it’s become
so cumbersome to go public, particularly when you’re smaller, it has become
so expensive, that instead of going public, instead of doing an IPO,
they’re going to sell. I can understand from the owner’s perspective why
they may choose that, but from the perspective of the economy overall, it’s
not a good thing.
GHARIB: Governor Markell, what is the biggest obstacle keeping
companies from going public?
MARKELL: Unfortunately, over the last 10 or 15 years, there have been
a number of policy changes which have made it more burdensome and more
expensive for companies to go public. Probably the best known one is the
Sarbanes-Oxley. It’s important to protect the public, but there are
things that we can do like delay it for smaller companies when they have to
start complying with all of these rules. I think what we will then see is
more companies choosing to go public and then creating additional jobs.
GHARIB: So what specifically would you propose to turn this
MARKELL: My particular focus has to do with the initial public
offerings and making it simpler and less expensive for emerging companies
to go public in this country. And then really separate from the IPO issue,
but still very important, has to do with the corporate tax environment more
broadly. The president has made a good start with respect to his
proposal to reduce corporate taxes. But the fact is, we’re seeing — and
I’ve had a lot of conversations with CEOs around the country in different
industries — we just need to make sure that we’re prepared to compete with
the taxes in some of these other countries so that companies don’t move
wholesale. That’s another big issue. All of this is really wrapped in
together in terms of how do we make our country more competitive.
GHARIB: Many people would sympathize with your argument about taxes
and regulations, but they can say that the real problem is that other
markets around the world like in Asia have become much more sophisticated
and they’re a viable option to the U.S. So what’s the way around that?
MARKELL: First of all, they’re absolutely right. What we have to do
then is figure out we can’t stand still. We can’t rest on our laurels.
What is it that they’ve done to become more viable and how can we leap
ahead? We’ve always got to be saying how do we stack up competitively
with respect to education, with respect to quality of life, with respect to
taxes, with respect to higher education. There’s a whole range of issues
here. And what we’ve got to do is say, we don’t rule everything anymore.
The world does not revolve around us. We’ve got to understand where we
stack up in the global competitive environment and figure out where we have
to keep getting better.
GHARIB: And the other issue is that some people say that I want to
take my company public, but this just is not a good environment to go
public, a lot of uncertainty going on in the European economy. The U.S.
economy, it’s a volatile stock market. What are your thoughts on that?
MARKELL: I disagree a little bit with the premise of your question in
the sense that the Dow has done extraordinarily well over the last many
months. It may not be as good as it was at the boom, but it’s not such a
bad time if we can make it easier, if we can make it less cumbersome, if we
can make it less expensive. So some of the broader issues, we may not be
able to control, but there are things that we can control.
GHARIB: Governor Markell, thank you so much for your time.
MARKELL: Thank you. It was my pleasure.