The US stock market is becoming a dumping ground

A LOT of people are worried about the shrinking number of public companies in the US, but quality is an even bigger problem than quantity.

JPMorgan Chase chief executive officer Jamie Dimon lamented in his most recent annual letter to shareholders that there are only 4,300 US stocks, down from 7,300 in 1996. Meanwhile, Dimon noted that the number of private companies backed by private equity has ballooned to 11,200 from 1,900 during the past two decades.

It’s unquestionably harder to be a public company than it used to be. Dimon hit on many of the reasons, including increasingly burdensome regulation, intensifying public scrutiny and a growing obsession with short-term financial results. It’s also no longer necessary for many companies. Private equity is awash with cash, making it easier for businesses to raise capital from private sources. So, why go public?