In less than two decades, more than half of all publicly traded companies have disappeared, according to Jason Zweig, a columnist at The Wall Street Journal.
There were 7,355 U.S. stocks in November 1997. Today, there are fewer than 3,600.
What happened?
“Several factors explain the shrinking number of stocks,” Zweig writes, “including the regulatory red tape that discourages smaller companies from going and staying public; the flood of venture-capital funding that enables young companies to stay private longer; and the rise of private-equity funds, whose buyouts take shares off the public market.”
Although there have been some high-profile Silicon Valley companies that have gone public in recent years, many are enjoying the perks of staying private. Let’s not forget that Uber, currently valued at $68 billion, is still a private company.
One consequence of having fewer stocks is that stock pickers have a much harder job. This “helps explain why stock pickers have been underperforming,” Zweig writes.