U.S. Has Lost 50% Of Public Companies Since The 1990s

The number of publicly-listed companies traded on US exchanges has fallen substantially from its peak in 1996.

Photo Insert: With fewer companies listed, there may be a decrease in overall transparency and investor trust in the market.

Back then, the number exceeded 8,000 companies. Today, that count has dropped by more than 50% to just 3700, according to data from the Center for Research in Security Prices, Nicole Goodkind reported for CNN.

It’s not that America has half as many companies as 30 years ago – it’s that companies are increasingly staying private, largely outside the scrutiny of the public eye.

Publicly listed companies are subject to regulatory oversight and disclosure requirements, which help ensure transparency and maintain investor confidence.

With fewer companies listed, there may be a decrease in overall transparency and investor trust in the market, said Matthew Kennedy, head of data and content at Renaissance Capital.

It also consolidates power and leads to a lack of competition: Just two stocks, Apple and Microsoft, account for about 15% of the entire S&P 500. The pandemic-induced recession in 2020 and subsequent cycle of sky-high inflation rates have exacerbated the downward trend, say economists.

Fears of a softening economy and market volatility have caused initial public offerings to dry up almost entirely. In 2022 the US IPO market fell 94.8% to $8 billion, a 32-year low.

That downturn has continued; the total capitalization of new stock in the first quarter of 2023 declined by 60% relative to last year, reported CRSP.

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