How to kill the public stock market.

Step 1: The number of public companies naturally shrinks each year due to mergers, takeovers, and bankruptcies.

Step 2: Use regulatory “reforms” to radically reduce the rate of new IPOs, shrinking the number of public companies from 8,800 to 3,600 since 1997.

Step 3: Steadily increase the number of regulators, lawyers, activists, pressure groups, and “governance experts” against the shrinking number of public companies.

Step 4: The “Pounds per square inch” of pressure on each public company increases, further disincenting new IPOs and incenting private takeovers.

Step 5: Private growth companies go public much later or not at all, shifting growth and capital gains from the public to the private market.

Step 6: Without growth, it gets harder and harder to realize the gains in the public market required by investors, particularly for retirement plans.

Step 7: Layer on top a healthy dose of market manipulation, mutual fund front-running, and HFT profit extraction.

Step 8: Repeat as necessary until the blood is completely squeezed from stone, then wonder what happened to the good old days.

Source Tweets: 1,2,3,4,5,6,7,8

Category:
Business

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