Courtesy of Pam Martens
By Pam Martens and Russ Martens: August 23, 2017
In 1996 the U.S. had 845 Initial Public Offerings. Last year, after twenty passing years of research and budding new technologies should have fueled growth in the IPO market, the U.S. had a paltry 98 IPOs. According to a study by the law firm, Wilmer Cutler Pickering Hale and Dorr, gross proceeds from IPOs in 2016 were $18.54 billion while the “average annual gross proceeds for the 12-year period preceding 2016 were $35.73 billion — 93 percent higher than the corresponding figure for 2016.”
Not only has the U.S. seriously lost ground in IPOs but the total number of publicly traded companies in the U.S. is down by almost half in the same 20 year span. Last September, Jim Clifton, the Chairman and CEO of Gallup, the polling company, explained why he thinks this is happening. Clifton wrote:
“The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.”
Let’s also not forget that quite a number of those 7,300 companies that were listed in 1996 failed in the great dot.com crash of 2000 because Wall Street’s minions pumped out bogus buy recommendations on new companies that didn’t have a prayer of making it as an ongoing business. The real motive behind the listing was to fuel fat bonuses for themselves. The largest investment banks were calling the startups they were peddling to the public “dogs” and “crap” behind closed doors while lauding their virtues in “research” released to entice the public to buy.
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