Risk

A Crowdfunded Company Makes It All the Way to the NYSE

But since then, shares of Myomo, a medical robotics firm, have been on a roller-coaster ride.
Vincent RyanJune 20, 2017
A Crowdfunded Company Makes It All the Way to the NYSE

Executing an historic initial public offering is one thing, keeping your company’s shares from undergoing wild price swings is another.

On June 9, Myomo, a medical robotics firm, became the first issuer to raise capital under Regulation A+ of the JOBS Act and then list on the New York Stock Exchange.

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A Regulation A+ offering, nicknamed “IPO lite,” allows a smaller private company to raise up to $50 million annually by selling company shares to both accredited investors and the general public. The sale to the public occurs through a crowdfunding campaign on a web portal. (Myomo’s equity offering was conducted on Banq, an online investing platform run by TriPoint Global Equities.)

Myomo raised $5 million by selling 665,498 shares of its common stock to the public at $7.50 per share. A simultaneous offering to accredited investors — most of whom are early Myomo investors — raised an additional $2.9 million. Then, on June 12, Myomo shares began trading on the NYSE under the symbol, “MYO.”

Analysis_Bug3But since Myomo stock began trading, its share price has been volatile. MYO climbed to $23.20 on Monday, only to fall back to $17.51 early Tuesday, and then rebound a little, to $19.70, later this morning.

Companies that use Regulation A+ really can’t avoid listing on a stock exchange. The securities sold become freely tradable, so even if a company doesn’t list on an exchange an investor could take his or her shares to a broker-dealer to sell. The broker-dealer would go to the Financial Industry Regulatory Authority and be granted a ticker symbol.

Broker-dealers and crowdfunding portals that have an interest in seeing Regulation A+ transactions take off are probably hoping that Myomo’s share price stabilizes. As of December 2016, 165 companies had filed with the SEC to do a Regulation A+ offering, but the success stories have been few and far between. None of them has made it as far as Myomo and earned a spot on the NYSE.

That’s a significant achievement for sure, but what happens next will have a bigger influence on whether Regulation A+ offerings followed by a listing on a major stock exchange become an accepted path to the public markets.