Shaky Ground: The Impact of KPMG Stock Offering

As reported earlier this year on AccountingWeb, KPMG [1] filed for a potential IPO last May to fund its technology consulting practice, and is now in the midst of negotiating terms for the offering with Morgan Stanley Dean Witter.

What is the impact of such an offering? While KPMG hopes to raise $2.5 billion, analysts are skeptical that Wall Street will receive the stock sale with open arms.

First, buyers have to get past the often-perceived stodgy mindset associated with a Big 5 firm. Even though the IPO is for the technology practice, analysts predict that there may be some confusion as to what buyers are purchasing at the time the IPO begins.

Second, the SEC's auditor independence hearings continue, and again, analysts remain skeptical as to the timing of the IPO: is this meant to coincide with a possible ruling against the Big 5 firms?

Still, KPMG's take on the situation is that it must go public or the technology practice will be swallowed up by other companies. To survive means to put yourself on the line.