Of the U.S. companies that went public in the United States in 2010, almost 10%, or ten companies turned to foreign markets. This is a very disturbing trend in that only two American companies went public outside the United States from 1991 through 1999, and only 75 companies chose foreign stock markets from 2000 through 2009.
Information announced by Dealogic and Grant Thornton indicated that in 2010 American companies turned to stock markets in Australia, Taiwan, South Korea, Canada and the United Kingdom.
While the factors that impacted the decision for each company who went public overseas vary, reasons include the increasingly tougher regulatory environment in the United States as well as overall costs to go public. In recent years, U.S. investment banks have increasingly been less interested in underwriting initial public offerings (IPOs) for smaller companies, and institutional investors are not at all interested in smaller companies.
The dwindling number of U.S. companies going public in the U.S. has huge implications for entrepreneurs being able to grow, contribute to the U.S. economy and add jobs in the U.S. As American entrepreurs are increasingly forced to look overseas for stock market listings, the fear also exists that they’ll shift their geographic focus to the country or region where they have their stock market listing.
More disturbing is the dwindling number of U.S. public companies. At the beginning of 1998 there were almost 8,800 U.S. public companies. By the end of 2009 the number decreased 40 percent to 5,100.
Author: Jeffrey Friedland
Disclaimer/Disclosure: Friedland Global Capital assists growing entrepreneurial companies in Big Emerging Countries to obtain stock market listings in the United States, Canada, Germany, the United Kingdom and Singapore.
Filed under: FINRA, IPO, Nasdaq, OTC BB, OTC Bulletin Board, OTC QB, SEC, Singapore
