Fewer U.S. Listed Companies – Is That a Problem?

Between 1996 and 2016, the number of U.S. listed companies declined by about 50 percent. There are now fewer U.S. listed companies than there were in 1976. Some observers have raised the alarm about this decline. For example, SEC Chair Jay Clayton in a speech last summer called the decline in the number of U.S. listed companies “a serious issue for our markets and the country.” But before we can decide whether or not the lower number of public companies is a problem, much less what to do about it, we need to take a look at what is happening and why it is happening. A closer look suggests that the situation is more complex than it might appear at first glimpse.   What Has Happened? According to a study last year by Credit Suisse (here), there were 3,671 public companies at the end of 2016, compared to 7,322 at the end of 1996, representing a decline of 50.5% during that 20-year period. By way of further comparison, there were fewer U.S. listed companies at the…

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