A big trend in American business is the collapse in the number of listed companies. There were 7,322 in 1996; today there are 3,671.
The number of companies doing initial public offerings (IPOs), meanwhile, has fallen from 300 a year on average in the two decades to 2000 to about 100 a year since.
I wasn't aware of that number, but I was just thinking recently about how many fewer banks there are today than there used to be. In 1995 there were 10K; as of last year there are less than 5K.[1] So a 50% drop in that timespan, mirroring your numbers.
And the first article I came across looking for the latest 2017 number is about Amazon's interest in becoming a bank. Guess the trend validates the dystopian sci-fi trope of multinational conglomerates ruling everything in the future.
Interesting, but if you look at the graph banks were already well on a downward trend before 1994 - there were 14.4K banks in 1984, 13.4K in 1988, 12.5K in 1990, 11.7K in 1992.
""It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals.... Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many.... The battle of competition is fought by cheapening of commodities. The cheapness of commodities demands, caeteris paribus, on the productiveness of labour, and this again on the scale of production. Therefore, the larger capitals beat the smaller. It will further be remembered that, with the development of the capitalist mode of production, there is an increase in the minimum amount of individual capital necessary to carry on a business under its normal conditions. The smaller capitals, therefore, crowd into spheres of production which Modern Industry has only sporadically or incompletely got hold of. Here competition rages.... It always ends in the ruin of many small capitalists, whose capitals partly pass into the hands of their conquerors, partly vanish."
- Marx. Capital Vol I, Ch 25
"There is no America. There is no democracy. There is only IBM and ITT, and AT&T, and Du Pont, Dow, Union Carbide and Exxon. Those are the nations of the world today."
Interesting! I hadn’t seen this article, but now I’m curious how many of these were “fake” internet companies. Given it being 1996, it probably shouldn’t be too heavily dominated by fly by night internet companies (yet). I’d be curious how these numbers compare to say 1986 as another data point.
Not sure that thesis holds water. Michael Mauboussin published the paper, "The Incredible Shrinking Universe of Stocks: The Causes and Consequences of Fewer U.S. Equities" in 2017 [0].
The Big Ideas: IPO's and being public are more expensive with less benefit while at the same time M&A has flourished.
Even outside of the dotcom context the technology nowadays rewards consolidation.
All publicly listed internet portals of the 90s (Yahoo, Infoseek, Excite, Ask Jeeves) have been essentially overrun by Google. Retail had to either consolidate, slim down or delist due to a private equity infusion, with AMZN emerging as a clear winner.
A big trend in American business is the collapse in the number of listed companies. There were 7,322 in 1996; today there are 3,671.
The number of companies doing initial public offerings (IPOs), meanwhile, has fallen from 300 a year on average in the two decades to 2000 to about 100 a year since.
(1) - https://www.economist.com/news/business/21721153-company-fou...