The Bourse Identity

Foxconn’s prospectus to issue a public offering to raise money for its nascent foray in to cloud computing is less revealing for what it proposes than where the offering will take place.

Rather than leverage its newfound admiration in the US (or at least, in a couple pf offices in Washington) by accessing the Nasdaq or NYSE, instead Foxconn is opting for a far less prominent bourse: the Shanghai Exchange.

The reasons are obvious: The Shanghai bourse lacks the capital controls and oversight of the world’s dominant financial exchanges. A company, even one as large as Foxconn, can get away with a lot more, since reporting requirements and level of scrutiny are so less rigorous than in New York or Munich or London. Foxconn’s financial picture is opaque: even reporting on its revenues and profits remains an uncertain undertaking. Staying offshore makes that possible.

Finally, Shanghai is a Chinese exchange and Foxconn is a Chinese company. (Yes, I know it’s based in Taiwan. But look where the bulk of its facilities, workers, investment and attention is. And keep in mind that for many Taiwanese, China is still the motherland.) This latest move underscores that fact.

Isola’s IPO

Isola is going public.

No big surprise there, except for 1) it is about six years later than I would have first thought and 2) November 2011 is not exactly the peak of the IPO craze.

Although I have known Ray Sharpe, Isola’s CEO, since his days at Alpha Metals (almost two decades ago), I haven’t yet spoken to him about the decision. That said, I would guess that Isola feels the next 12 months could be rocky. The company has blown the doors off so far in 2011, and perhaps they think they should strike while that iron is hot.

Moreover, if 2012 sinks, then they might need the cash from the IPO to help cover the downturn. I can’t see TPG wanting to put more of its own capital in.

Isola was the largest laminate maker to be privately held. This is a big story.