Released by Grant Thornton LLP, A Wake-Up Call for America demonstrates that market structure changes implemented over the last decade are causing significant, secular declines in the number of publicly listed companies in the United States. The study reveals how low-cost trade execution has destroyed the ecosystem that once supported the small business economy, undermining job creation, economic growth, and U.S. competitiveness.
- Since 1991, the number of U.S. exchange-listed companies is down more than 22%, and when adjusted for real (inflation-adjusted) GDP growth, that percentage balloons to a startling 53%.
- 360 new listings per year — a number we’ve not approached since 2000 — are required to replace the number of listed companies lost in the U.S. In fact, the U.S. has averaged fewer than 166 IPOs per year since 2001, with only 54 in 2008.
- Up to 22 million U.S. jobs may have been lost because of the broken U.S. IPO market.
“The United States stock markets are experiencing a disturbing decline,” said David Weild, Capital Markets Advisor at Grant Thornton LLP. “Loss of public companies, and loss of the feeder system to the public markets, is capping opportunity for Americans. This calls for urgent attention by the Obama Administration, Congress and the U.S. Securities and Exchange Commission (SEC) to give our economy a fighting chance.”
The study shows that other developed nations are performing markedly better than the United States when it comes to maintaining or growing numbers of public companies, and it includes recommendations for improving both public and private stock markets.
The U.S. listed markets — unlike other developed markets — have been in steady decline, with no rebound, since 1997.
The number of listed companies from global exchanges indexed to 1997
(Click on the chart to view a larger image)
Note: Deutsche Börse data is unavailable prior to 1997.
Source: Capital Markets Advisory Partners, World Federation of Exchanges, individual stock exchanges. Excluding funds.
