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Supply & Demand in the Stock Market

The increasing number of private equity companies compared to publicly traded companies may be one of the reasons behind the continuous rise in stock prices. According to a recent podcast episode, private equity firms with over $100 million in revenue make up 87 percent of that category, while only 13 percent of publicly traded companies fall into the same revenue category.

Data from Apollo’s Torsten Slok shows that private equity firms have been growing at a rapid pace, managing about 20 percent of total U.S. corporate equity by 2021, compared to just 4 percent in 2000. This growth in private equity investments has led to a decrease in the number of publicly traded companies in the U.S., from over 7,000 stocks in the mid-1990s to around 3,500 now.

While the shrinking number of public stocks may suggest more dollars chasing fewer stocks, there are other factors at play. Many of the micro-cap companies that went public during the dot-com bubble era have since gone out of business due to lack of business model or fundamentals.

However, the remaining publicly traded companies are now larger, older, and more profitable on average. This shift has also contributed to greater informational efficiency in the stock market, making it harder for investors to outperform the market.

Overall, while the stock market has been going up over time, the number of stocks listed on the exchange is not the sole reason behind this trend. There are various factors at play, including the growth of private equity investments and the changing landscape of publicly traded companies. Welcome to DailyBubble, your go-to source for all things pop culture! Today, we are diving into the latest news and updates in the entertainment world.

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