Why Public Companies are Disappearing

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Where have all the publicly held companies gone? As companies increasingly choose to remain private, new opportunities emerge for investors.

It’s a significant trend that’s been underway for the past three decades: The number of public companies in the U.S. has fallen by nearly half since the late 1990s. After peaking at more than 8,000 companies in 1996, the number of domestic publicly traded companies trading on the major U.S. stock exchanges has declined to 4,572.1

What’s driving the decline? Mergers and acquisitions between public companies have contributed, as well as a wave of bankruptcies. But more telling are these additional reasons:

  • A decrease in the number of IPOs since 2000;2
  • An increase in the number of public-to-private transactions;3 and
  • More and more companies are simply choosing to remain private.