Pandemic markets revive U.S. stock listings

Since the pandemic hit, the U.S. equity markets have enjoyed an unprecedented boom in new listings.

New research from the U.S. Federal Reserve Board finds that U.S. stock markets (including the New York Stock Exchange, Nasdaq and Amex exchanges) added more than 1,100 new listings since mid-2020. That is a 28% jump, to 5,301 companies by the end of 2021, from 4,144 companies in mid-2020.

Public company listings had been in decline since 1997, when total listings peaked at 7,842, the report noted.

The turnaround over the past couple of years is explained by both a mania for shell company listings — known as special purpose acquisition companies (SPACs) — and a surge in traditional initial public offerings (IPOs).

According to the report, just over half (53%) of the new listings were in SPACs, with the rest in traditional IPOs.

“Even without the surge in SPACs, we would have seen a historically large increase in the number of publicly traded companies,” the report said, noting that the number of traditional public companies grew at a 7.5% average annual rate over the period — reversing a 2.8% average annual decline between 1997 and 2020.

The report said that financial market conditions during the pandemic — including rock bottom interest rates and easy liquidity — has been “particularly favourable” for new listings.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.