The stock market is vanishing

[dealmaker]

Bob Bryan, provided by


Published 10:53 am, Thursday, September 1, 2016

REUTERS/Toby Melville

The stock market isn't what it used to be.

As noted by Steven DeSanctis, equity strategist at Jefferies, the sheer number of companies listed on stock exchanges has been dropping off precipitously.

The number of firms with shares publicly listed has fallen to 3,267 from a peak of 6,364 in 1997, based on data from the Center for Research in Security Prices at the University of Chicago's Booth School of Business.

This, in fact, is the lowest number of listed stocks since 1984.

http://www.sfgate.com/technology/businessinsider/article/The-stock-market-is-vanishing-9198111.php

 

[d08]

Governments keep approving takeovers, meaning larger giga-corporations that have full control over people and pricing. Also the process of listing should be simpler and much much cheaper.

 

[tradelosses]

no kidding...the secondary market is more profitable. why go IPO at $40 million when you stay private forever at 400 million

 

[Occam]

Good posts, thanks. Another contributing factor is the ultra-low interest rates, which make it very easy for a big company to snap up quality mid-cap companies, or even bigger companies (e.g., WDC buying SanDisk), from the public equity markets, by issuing low-yield, yet potentially high-risk, debt. Private equity is snapping up public companies, too. I seem to be reading many more headlines about high-profile takeovers than I do about high-profile IPO's, especially when it comes to domestic ones.

 

[Metamega]

David Weild, former vice chairmen of Nasdaq made a comment on Ghost Exhange about this topic. I'd have to watch it again to quote exactly, but he did throw some numbers out about the number of listed companies and how much less they employ of U.S population.

He did use Intels IPO and beginning as an example and how in today's market with their story, they would've probably just disappeared into the OTC market. The number of IPO's are down, the amount of people employed by public companies is way down.

We traders expect liquidity that never existed (I'm just guessing) in the 80's / 90's. If a company doesn't have a HFT market makers, it doesn't even make our radar.

I could say take a look at the TSX venture exchange which is to me a pretty sad exchange. No liquidity, over crowded with probably junk hiding possibly a few gems that could've benefited from a good IPO and market participants.

 

[S2007S]

no kidding...the secondary market is more profitable. why go IPO at $40 million when you stay private forever at 400 million

Exactly... All of the sudden there is more demand for these unicorn startups than there is for any established company on s&p ......
Look at uber, can't make a dime of profit but valued at $50+ billion....Snapchat another company valued at $20 billion+ on the secondary market, company is maybe worth 1/50th of that.