SEC Says Brewery May Use Internet To Offer Its Stock
Spring Street Brewing has been given a "cautious blessing" by the SEC to use the Internet for issuing and selling its own stocks. This is the first company that will use the Internet as a primary market and a secondary market.
It is very likely that the Internet will be used more frequently as a source of capital by companies that are "too small to interest Wall Street underwriters but are reluctant to sell [themselves] to venture capitalists. So [Spring Street Brewing] came up with a new approach. It posted a page on the World Wide Web to let people interested in buying and selling its stock meet and do deals. It called the system Wit-Trade (the secondary market), after the Wit beer it brews. And it launched an initial public offering (IPO), raising $1.6 million without paying a penny to underwriters."
As the Journal indicated, if such trading increases, the SEC would be the only viable candidate to monitor and regulate them, as the New York Stock Exchange (NYSE) and the National Association of Security Dealers (NASD) regulate their respective markets.
Source: WSJ, March 26, 1996, p. C1
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