A Wall Street Journal article by Jason Zweig provided some sobering data concerning the number of publicly traded companies.
We would never have guessed that the number of publicly traded companies have shrunk from 7,355 as of November of 1997 to less than 3,600 today.
The Center for Research in Security Prices at the University Of Chicago Booth School Of Business noted that in 1997 there were more than 2,500 small stocks and close to 4,000 “micro-cap stocks” – at the end of 2016, there were less than 1,200 small stock and fewer than 1,900 micro-cap stocks left.
Clearly, this shrinking of the universe of stocks may be contributed to private-equity funds, Sarbanes-Oxley and Dodd-Frank imposed cost burdens, the impact of the 2008 financial crisis and other factors. This shrinking universe has ramifications for those organizations that deal with public companies, whether Transfer Agents, Investment Bankers, Law Firms, and others.
The question we pose…how much further a decline will there be, given the DEARTH OF IPO’S and the robust merger activity we see?