Rumours of the Death of the American Public Company are Greatly Exaggerated

Rumours of the Death of the American Public Company are Greatly Exaggerated

Brian Cheffins

Series number :

Serial Number: 
444/2019

Date posted :

April 13 2019

Last revised :

April 17 2019
SSRN Share

Keywords

  • public companies • 
  • Corporate governance • 
  • private equity • 
  • Initial Public Offerings

The public company has historically been a crucial element of the American economy. Various predictions have been made recently that the public company’s future is bleak. This essay maintains these gloomy conjectures are erroneous. Companies leave the stock market by way of public-to-private buyouts with some regularity but large firms are rarely affected.

Prosperous start-up companies are delaying joining the stock market but nevertheless usually end up in the public domain. There are considerably fewer public companies now than there were twenty years ago. Based, however, on the ratio of aggregate market capitalization to gross domestic product, the public company is currently as important relative to the U.S. economy as it ever have been, if not more so.
 

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