1st in a series discussing the decline of US public companies
According to a 2017 Report by the Department of the Treasury, the number of domestic public companies in the US has declined by nearly 50% over the last two decades. This trend is 100% opposite the trend in other developed countries with similar institutions and economic development. While US public listings dropped by about half since 1996, listings in a sample of developed countries increased by 48%.
Similarly, according to the Treasury Report the amount of debt and equity primary capital raised in the private markets was noticeably more than the comparable amount raised in the public markets. From 2012 through 2016, the debt and equity capital raised through private offerings was 26% higher than that raised through the public markets.
A subsequent article will address the following questions:
- Why are there fewer companies and IPOs in the US?
- What benefits is a company forfeiting by not “going” public?
- How does this trend negatively impact “Main Street” investors?