~30 years ago (in 2002), the Sarbanes-Oxley Act was adopted. In the wake of scandals like Enron and WorldCom, it imposed a bunch of new rules that make being a public company more expensive. At the margin, that would impact the count of public companies.
It's also much easier to raise money for private startups. Back in the day there was a point at which you _had_ to go public in order to finance your business. Now you can have raises like the recent $122 billion OpenAI raise. https://openai.com/index/accelerating-the-next-phase-ai/
Does this calculation take into account garbage stocks and securities fraud? Perhaps some of the reduction was the result of regulation favorable to the consumer?
Sorry if I'm being very dumb, but is there an actual link to the article I can click here or is this just a tweet by a guy saying he wrote an article?
Anyway the conventional finance answer to why there are fewer public companies around these days is just that private markets are so much bigger. PE and debt financing (both public and private) are probably responsible for a much bigger share of companies' financing than they used to be.
More likely it was the 1979 supreme court case Reiter v. Sonotone Corp which instituted the "consumer welfare standard" which shifted antitrust enforcement from focusing on protecting competition in markets to "protecting consumers" which made it much easier for large mergers to be approved.
Probably from all the consolidation. In the USA there used to be hundreds of companies supplying various industries. Now there's generally 2-5, and they all have the same shareholders.
BlackRock
Vanguard
State Street
Northern Trust
etc
"Vanguard and BlackRock are the top two owners of Time Warner, Comcast, Disney and News Corp, four of the six media companies that control more than 90% of the U.S. media landscape.
BlackRock and Vanguard form a secret monopoly that own just about everything else you can think of too. In all, they have ownership in 1,600 American firms, which in 2015 had combined revenues of $9.1 trillion. When you add in the third-largest global owner, State Street, their combined ownership encompasses nearly 90% of all S&P 500 firms.
Vanguard is the largest shareholder of BlackRock. Vanguard itself, on the other hand, has a unique structure that makes its ownership more difficult to discern, but many of the oldest, richest families in the world can be linked to Vanguard funds."
Seems to be little incentive for companies to go public, other than fleecing 401k account holders that have to invest in funds managed by the same companies that underwrite IPOs.
32 comments
It's also much easier to raise money for private startups. Back in the day there was a point at which you _had_ to go public in order to finance your business. Now you can have raises like the recent $122 billion OpenAI raise. https://openai.com/index/accelerating-the-next-phase-ai/
https://www.washingtonpost.com/opinions/2026/04/13/lawyers-c...
https://archive.is/7ATtM
The main thesis is that the liabilities risk/cost from securities class action lawsuits is a tax on public companies.
>I guess that's discouraged on X?
Yes, Elon thinks links in posts should be heavily suppressed by the algorithm because they mean people get redirected from scrolling.
So now everyone buries the link in the replies, that are conveniently hidden unless you log in.
Anyway the conventional finance answer to why there are fewer public companies around these days is just that private markets are so much bigger. PE and debt financing (both public and private) are probably responsible for a much bigger share of companies' financing than they used to be.
The number of alternative public and semi-public companies went up exponentially (Reg CF/Reg A, crypto ICOs).
After reaching some thresholds a Reg A company can become public and even trade on OTC markets.
BlackRock
Vanguard
State Street
Northern Trust
etc
"Vanguard and BlackRock are the top two owners of Time Warner, Comcast, Disney and News Corp, four of the six media companies that control more than 90% of the U.S. media landscape.
BlackRock and Vanguard form a secret monopoly that own just about everything else you can think of too. In all, they have ownership in 1,600 American firms, which in 2015 had combined revenues of $9.1 trillion. When you add in the third-largest global owner, State Street, their combined ownership encompasses nearly 90% of all S&P 500 firms.
Vanguard is the largest shareholder of BlackRock. Vanguard itself, on the other hand, has a unique structure that makes its ownership more difficult to discern, but many of the oldest, richest families in the world can be linked to Vanguard funds."