Fewer Listed Companies: Is That Good or Bad for Stock Markets?

 Today’s WSJ provides an interesting historical perspective of the cumulative effects of the dot-com bust, implementation of Sarbanes-Oxley, M&A activity, share buybacks, and growth of private equity on the number of listed shares in US stock markets during the course of the past couple of decades. Also see http://derivatives.garven.com/?p=6639 for an academic perspective of the so-called “U.S. listing gap”, which is apparently due to a decrease in new listings coupled with an increase in delistings over this period.
As the Dow Jones Industrial Average broke through 25000 and other stock market indexes continue rising to new highs, the number of publicly traded U.S. companies keeps shrinking.

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