Markets
Banks Deregister

Banks Queue Up to Deregister

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The Securities and Exchange Commission’s recent admission that full implementation of the Jumpstart Our Business Startups (JOBS) Act would be delayed has done nothing to deter one group of businesses from aggressively using the law to its benefit. Seventy-one small banks have filed to deregister their securities and stop reporting to the SEC since the Jobs Act was signed into law in early April, according to researcher SNL Financial and filings with the commission. What’s more, 61 of those banks filed to deregister between April 2 and May 25, which was more than the aggregate number of banks that filed to deregister over the entire prior four years, SNL noted. Under the Jobs Act, financial institutions can now terminate registrations if they have fewer than 1,200 shareholders, an increase from the prior 300-shareholder ceiling. Additionally, private banks don’t have to register with the SEC until they have 2,000 shareholders, up from 500 shareholders prior to the act.

Deals
Rosetta Genomics

Registered Direct Deals Power Rosetta Genomics Roller Coaster

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The price of stock in Rosetta Genomics Ltd. (ROSG) shares moved up dramatically after it issued a $2.2 registered direct private placement in mid-May, but the market reacted less enthusiastically after a $6.57 million issuance at the end of the same month. (Aegis Capital Corp. placed both registered directs with undisclosed investors.)

Still, a dramatic overall increase of 90.3% from early April through the end of the second quarter testifies to optimism over new genetic diagnostic testing work - and contrasts with the plunge the stock took after it announced a $1.38 million registered direct offering on the morning of April 12. That announcement was followed by a decline of 55% from the previous day’s close.

Markets

Chinese Issuers Remain Under Pressure

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Muddy Waters’ fraud allegations leveled at New Oriental Education & Technology Group (EDU) this week should remind investors that Chinese issuers listed in the U.S. still wear a bull’s eye, even if they happened to complete a conventional IPO. The Muddy Waters report, which claims that New Oriental Education is lying about its store growth, financial performance and structure, drove the company’s share price down 57% to $9.60 on Tuesday and Wednesday. Shares rebounded to $11.20 on Thursday. New Oriental Education raised $112.5 million in an IPO in 2006 and an additional $25 million in a secondary deal in 2007. Muddy Waters, a short seller, also cast doubt about the financial reporting veracity of other Chinese educators trading in the U.S., including TAL Education Group (XRS) and Ambow Education Holding (AMBO).

Markets

Cowen Leads Q2 Growth Capital Deal Making

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Cowen & Co. (COWN) is reemerging as a leading PIPE placement agent, just as market participants are becoming more focused on identifying promising small issuers and providing them with non-toxic growth capital. The New York-based investment bank facilitated 24 unstructured equity private placements (EPPs) valued at $915.7 million in the first half of 2012 for companies with market capitalizations between $10 million and $1 billion, according to PlacementTracker, a service of Sagient Research. In the full year of 2011, Cowen facilitated 10 such deals valued at $274.6 million. Mutual fund manager Fidelity Management & Research Corp.