The financial media cannot stop tweeting about the possibility of Dow Jones Index breaching the 20,000 mark. Rising stocks boost public confidence and sense of affluence. Yet, for the broad population, the rising market index doesn’t seem to generate widespread excitement. Why is that? A possible reason is: lower direct participation by the public in market activities, both in listed securities and new issues (IPOs).
|(Source: Wall Street Journal)|
An excellent write up last week in the Wall Street Journal (“America’s Roster of Public Companies Is Shrinking Before Our Eyes”) highlighted the declining pace of IPOs. Tech IPOs have been particularly lackluster. In 2016, technology companies raised only $4.3 billion from public markets, versus $19 billion from private equity investors. Overall, 111 companies went public on U.S. exchanges, raising $24.2 billion. That is the lowest dollar volume since 2003, according to Dealogic.