Homepage / Investment / President Trump and the case of the shrinking US stock market
Contrary Mortgage against. House Security Mortgage against. HELOC: That is Greatest? Expected in order to co-sign? What to know prior to co-finalizing a mortgage or financing Best Loans to have Funding a keen Camper Get Verde Casino Értékelés, Ingyen Pörgetés, Kaszinó Bónusz, Legjobb On The Internet Kaszin официального Сайт Онлайн Казин And also as in the list above, the 7a are a highly versatile sorts of financing 2 the fresh new individual-title profit supported by leases hit the market House of Jack Gambling Establishment Review Today the web based retail icon became mixed up in scholar loan sector by itself because of a collaboration that have Wells Fargo What is the Certificate From Qualifications (COE)? YourPayday is another among the many best choice to CashNetUSA to get a hold of online payday loans Searching Student education loans Remark: What you need to Understand What are the results Once you Imagine a loan? Washington FHA Lenders Washington FHA Loan Recommendations 2022 You should make sure When deciding on web site to have an online payday loan Betebet Giriş Adresi 846betebet com Casino X Официальный Сайт Играть В Казино середине Онлайн House of Jack Gambling Establishment Review ASUS Dual GeForce RTX 4070 OC 12GB GDDR6X 192 Bit Beyaz DLSS 3 Ekran Kartı Black Myth: Wukong Hediyeli Казино 1xbet Играть Онлайн бесплатно%2C Официальный Сайт%2C Скачать Клиен Efes Bet Casino: Kazanmanın Garantisiyle Eğlencenin Adresi Efescasino Güncel Giriş Sitesi Türkiye’nin En Büyük Yazlık Konut Üreticisi новые Бонусы В Онлайн-казино За Июнь 2024 Лучшие Предложения ддя Игр Pin Up 306 On Line Casino Başlanğıc Qeydiyyat, Bonuslar, Yukl เข้าร่วมทดลองเล่นสล็อตในเว็บตรงของเราและรับประสบการณ์ที่สนุกที่สุ 2024-ci Ilin Daha əla Qumar Saytları ️ Azərbaycanın Top Onlayn Qumar Veb-saytları Slottica online casino oyunları Игровые слоты в 7к: окунитесь в мир азартных развлечений Kim Гјretiyor oyun makineler: zamanla test edilmiЕџ Гјreticiler yazД±lД±m Kim Гјretiyor oyun makineler: zamanla test edilmiЕџ Гјreticiler yazД±lД±m How to Examine for Diabetes at Home Just How to Provide Pet Cats Pills: Easy Tips as well as Techniques Essay Writing Tips – How to Write Personal Essays How to Play Free Golf Solitaire Online How to Find the Best Mobile Casinos to Play Mobile Casino Slots Online Gambling Establishments that Approve Mastercard: A Comprehensive Overview Free Slot: A Guide to Playing and Winning Online Online Gambling Enterprise Real Money No Down Payment: A Total Guide The Enjoyment of Online Port Gamings Dealing With Varicose Veins: Efficient Strategies for Relief and also Prevention Comprehending Phase 2 High Blood Pressure: Reasons, Signs, and also Treatment Affordable Essay Writing Service Bitcoin Gambling Enterprises: The Future of Online Gambling Instant Play Online Gambling Enterprise: All You Required to Know Online Slots Real Cash No Down Payment: An Overview to Free Rotates and Perk Uses Neteller Gambling Enterprises: A Comprehensive Guide to Safe and Secure Online Betting Online Online Casinos that Approve Neteller Online Casino Real Cash No Deposit: Play and Win Without Threat Blackjack Gamings for Fun: A Comprehensive Guide Online Gambling Establishments That Approve PayPal: A Full Overview Free Online Casino Games The Safest Online Gambling Sites Sugar Pills: What Are They as well as What Are They Made use of For? Why Are My Veins So Blue? Custom Term Papers – A Great Resource For Pupils Free Online Casino Slots A Review Play Free Blackjack Gamings Online: A Comprehensive Guide The Surge of Bitcoin Online Casinos: A Comprehensive Overview Leading Gambling Enterprises that Accept Mastercard: A Comprehensive Overview Top MasterCard Online Gambling Establishments: A Comprehensive Guide Just how to Detoxification Your Underarms: A Comprehensive Guide Discover the Enjoyment of Free Online Casino Site Games Leading Ports: A Comprehensive Guide to the very best Port Gamings What to Know When Playing a Slot Machine Online The Very Best Online Lending Application in Nigeria Free Online Port Games: A Comprehensive Guide Lidocaine Lotion: Makes Use Of, Benefits, and also Safety Details High Blood Pressure Migraine: Reasons, Symptoms, and also Therapy Online Casinos That Accept Neteller: A Convenient Repayment Choice for Online Betting Online Bitcoin Gambling Establishments: A Comprehensive Overview to the Future of Gambling The Benefits of Using PayPal for Gambling Enterprise Deposits What Is the Best Bitcoin Casino? How To Pick The Best Slots At Online Slot Machines Gambling enterprises cheat Mastercard: A Convenient and Secure Settlement Option Gambling Establishment Online Free: Everything You Need to Know Zenka Lending Application: Your Ultimate Guide to Rapid and Easy Borrowing Every little thing you Need to Find Out About Free Online Blackjack Discover the Thrilling World of Blackjack for Enjoyable Mastercard Online Casinos Online: A Comprehensive Overview Quick Individual Finances: Your Ultimate Overview Слоты на платформе Вавада – особенности и виды Официальные слоты в коллекции именитого kasino Азино777 Лучшие видеослоты в сертифицированном казино Вавада Игра в слоты Вавада с выплатой выигрышей: наслаждайтесь игрой и победами Появилось Объяснение Назначению Немировски На Пост Наставника Сборной Казахстана Хоккей Cash Advance Loans for Blacklisted: What You Required to Know 22bet App Ios És Android Mobil Verzió Letöltése 2024-ba Just How to Remain Erect for Hours: Pills, Tips, and also Natural Approaches Resmi Website Sinden Pin Up Turkey Online Casino Uygulamasını ️ Indiri 1win официальный Сай Базовые правила и условия игры в kazino online на настоящие деньги Ana amaç çevrimiçi kumarhane 7slots: önemli avantajlar ve kategoriler Как начать игру в казино онлайн на настоящие деньги 1win Apk: Um Melhor Aplicativo Pra Jogos De Cassino Aqui No Brasil” 1win Apk: Um Melhor Aplicativo Pra Jogos De Cassino Aqui No Brasil” Mostbet Azerbaycan Rəsmi Casino Giriş Və Qeydiyyat Mostbet A Миссди Ххк

In the last 20 years, the U.S. stock market has undergone an alarming change that too few people are aware of.

Between 1996 and 2016, the number of listed companies fell by half, from 7,322 to 3,671, according to data from Credit Suisse. This occurred despite the U.S. economy growing nearly 60 percent over the same period. What’s even more flummoxing is that the United States seems to be the only developed country that lost so many stocks. Most other countries actually gained around 50 percent.

So why is this happening? We can point to a number of culprits.

For one, merger-and-acquisition activity has strengthened in recent years, and when M&A takes place, a company is consequentially delisted (if it was listed before the deal). The same thing happens, of course, when a company goes out of business.

Another reason could be the growth of private capital, which allows companies to raise funds without having to go public. Between 2013 and 2015, the amount of private money invested in tech start-ups alone tripled from $26 billion to $75 billion, according to consulting firm McKinsey. As a result, more and more software firms are managing to reach $10 billion in value before their initial public offering. Think Dropbox, Airbnb, Pinterest, Uber — all of which, for now, have avoided selling shares to public market investors.

My belief is that, out of all the reasons for fewer U.S. stocks and IPOs, the most impactful has been the surge in federal regulations over the last two decades. Rising costs associated with being listed on an exchange and meeting compliance standards have prohibited IPOs for all but the largest U.S. firms.

This partly explains why more and more companies are delaying going public. Apple’s 1980 IPO came a mere four years after Steve Jobs, Steve Wozniak and Ronald Wayne founded the future iPhone-maker in Jobs’ garage. Today that number has risen dramatically. It’s now estimated that the average age of a tech firm at the time of IPO is 11 years.

Some might disagree that regulations have had much of an effect on the U.S. equity market. In a recent article, The New York Times‘ “Deal Professor,” Steven Solomon, writes there’s very little evidence that red tape has contributed to the dearth in IPOs. On the contrary, I believe the evidence is incontestable.

Consider the Sarbanes-Oxley Act (SOX), signed by President George W. Bush in 2002. Its goal, to prevent massive corporate fraud such as we saw from Enron and WorldCom, is an admirable one. But SOX has had several unintended consequences. Because the requisite internal control procedures are so costly and cumbersome — necessitating additional compliance and accounting positions, not to mention hundreds of hours in compliance-driven tasks — smaller firms are inevitably at a disadvantage.

More from iCONIC:
Harvard’s negotiation guru on Trump’s deal-making weak spots
Daymond John’s 5 best Shark Tank deals
5 famous companies that bootstrapped their way to success

As a result, many small to mid-sized companies are delaying going public, or avoiding it altogether, to escape the regulatory burden.

Before SOX, there were an average 528 IPOs a year. Since it was enacted, that number has fallen to 135, a decline of nearly 75 percent, according to Dealogic data. Last year only 111 IPOs made it to market, a far cry from the 779 that took place in pre-SOX 1996.

Other legislation has deterred even more companies from pursuing an IPO, including the Dodd-Frank Wall Street Reform Act. It’s little wonder that, in a 2016 survey conducted by the National Federation of Independent Business, small-business owners said “unreasonable government regulations” were their second-highest concern, following “cost of health insurance.” More than 33 percent said regulations were a “critical” problem.

But there’s hope. President Donald Trump has pledged to roll back many of the rules that have created friction for smaller companies seeking to expand. In December, the month after the election, the NFIB’s Small Business Optimism Index soared to 105.8, up from 98.4 in November, a 12-year high. Since then, the index has held a similar level, indicating that despite recent setbacks, Trump’s pro-growth agenda continues to excite small-business owners.

Only time will tell if Trump can succeed, but I remain optimistic his business-friendly policies can reverse the deleterious effects of the past 20 years.

By Frank Holmes, CEO and chief investment officer of U.S. Global Investors and a member of the CNBC-YPO Chief Executive Network

About YPO

CNBC and YPO have formed an exclusive editorial partnership consisting of regional “Chief Executive Networks” in the Americas, EMEA and Asia-Pacific. These Chief Executive Networks are made up of a sample of YPO’s global network of 24,000 top executives from 120 countries who are on the front lines of the economy and run companies that collectively generate $6 trillion in annual revenue.

Source: Investment Cnbc
President Trump and the case of the shrinking US stock market

Comments are closed.