Why the mysteries of corporate longevity matter to investors

HOW many companies stand the test of time? Remarkably few, to judge by the average span of quoted companies on the stock market.

Just over 1 per cent of the 1,513 UK-listed companies in 1948 still existed 70 years later, according to an analysis by two Cambridge professors. Roughly half of US public companies traded for 10 years or fewer over the past century, said Morgan Stanley. 

To be sure, a delisting does not necessarily mark the end of a company’s existence as a distinct entity. Private equity deals are a case in point. And a majority of delistings are due to takeovers, which can be lucrative for selling shareholders.