« Remembering: What do you remember about childhood? Does it matter? | Main | Marrakesh by Design. »

May 27, 2012

The Economist: "Companies are like jets; the elite go private."

20120519_LDP002_0.jpg
Photo: Jon Berkeley and The Economist.

The Decline of the Publicly-Traded Company? The public company idea is only about 150 years old and, like the slightly older animal we call "the corporation", is so far only a blip on the screen of world economic history. What will the future hold for companies in which the public is offered a shot at sharing in a company's growth and profits in return for their contribution of capital? Read in The Economist "The endangered public company: The rise and fall of a great invention, and why it matters".

The number of public companies has fallen dramatically over the past decade—by 38% in America since 1997 and 48% in Britain. The number of initial public offerings (IPOs) in America has declined from an average of 311 a year in 1980-2000 to 99 a year in 2001-11. Small companies, those with annual sales of less than $50m before their IPOs—have been hardest hit. In 1980-2000 an average of 165 small companies undertook IPOs in America each year. In 2001-09 that number fell to 30. Facebook will probably give the IPO market a temporary boost—several other companies are queuing up to follow its lead—but they will do little to offset the long-term decline.

Posted by JD Hull at May 27, 2012 11:00 PM

Comments

Post a comment

Thanks for signing in, . Now you can comment. (sign out)

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)


Remember me?