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The shrinking number of local public companies may hurt Louisiana. Here's why

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  Published in Business and Finance on Wednesday, September 17th 2025 at 19:00 GMT by The Advocate
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Tulane Professor Sheds Light on the Vanishing of Public Companies

Tulane University’s faculty has once again taken center stage in a conversation that sits at the heart of modern corporate America. On Wednesday, Dr. Jonathan K. R., a professor of corporate finance and law in the School of Business, delivered a lecture titled “The Loss of Public Companies: What It Means for Investors, Employees, and the Economy.” The talk, which drew a packed audience of students, alumni, and local business leaders, was part of Tulane’s annual “Finance Forum” series—a showcase of scholarship that brings academics and practitioners together to grapple with pressing market questions.

A Quiet Decline, A Loud Debate

Dr. R. opened his presentation by charting a striking trend: the number of publicly listed firms on the New York Stock Exchange (NYSE), Nasdaq, and the American Stock Exchange (AMEX) has been steadily shrinking over the past two decades. He cited data from the Securities and Exchange Commission (SEC) and Bloomberg, noting that in 2000 there were roughly 3,000 companies listed on the NYSE alone; by 2023 that number had fallen to around 2,300—a loss of nearly a third of the company base.

“The trend is not a random fluctuation,” Dr. R. said. “It reflects a structural shift in the way capital is raised, regulated, and used.” He identified three primary forces behind this decline:

1. Regulatory Costs: With the passage of the Sarbanes-Oxley Act (2002) and increasing compliance demands, the cost of staying public has become prohibitively high for many mid‑size firms.
2. Private‑Equity Boom: The explosion of leveraged buyouts and management buyouts (MBOs) has created an attractive alternative to the public market for companies seeking flexibility and control.
3. Market Volatility: The 2008 financial crisis and, more recently, the rapid swings associated with the COVID‑19 pandemic have made public market performance less predictable, pushing firms toward private ownership where valuation pressures are comparatively muted.

The professor also pointed to a subtle yet consequential change: as companies go private, the public’s ability to monitor and influence corporate behavior diminishes. “Public markets serve as a disciplining mechanism,” Dr. R. argued. “When companies exit the public eye, we lose an important layer of accountability.”

Who Is Losing Out?

The lecture highlighted that the shift toward privatization does not affect all stakeholders equally. Employees and institutional investors—particularly pension funds—are at risk of losing a valuable liquidity option. Employees may miss out on stock‑based compensation that has historically helped align their interests with those of shareholders. Meanwhile, institutional investors, who rely on publicly traded assets to diversify and meet fiduciary obligations, face reduced options.

“The erosion of the public market’s depth means we’re left with fewer, more volatile options,” noted Dr. R. He illustrated this with the case of TechNova Inc., a mid‑size software firm that was forced to delist after a series of activist investor campaigns and regulatory fines. While the company’s stock price had peaked at $45 a share, after delisting its valuation dropped to a fraction of its former value, eroding the wealth of dozens of employees and investors.

Policy Implications and Recommendations

Dr. R. didn’t just point out problems; he offered concrete suggestions for policymakers and regulators. Central among these was a call for a “balanced regulatory framework” that protects investors while not stifling corporate innovation.

• Regulatory Reform: The professor advocated for a tiered compliance system that scales obligations to company size and risk profile. “Large conglomerates are still subject to the strictest oversight; smaller firms should not be weighed down by the same administrative burden,” he said.
• Transparency Standards: He urged the SEC to revisit disclosure requirements to better reflect the realities of a shrinking public market. “We need tools that allow stakeholders to see how privately held companies are being managed,” he added.
• Incentivizing Public Listing: Dr. R. suggested tax incentives for firms that maintain public status for a minimum period. “Encouraging long‑term public engagement can help preserve the integrity of the market,” he noted.

The professor also highlighted the role of emerging technologies in reshaping this landscape. Blockchain-based securities, for example, could offer a hybrid solution that combines the transparency of public markets with the flexibility of private ownership.

A Call to Action

The lecture concluded with a call to both academia and industry: “We are at a crossroads,” Dr. R. said. “Our research must inform policy; our policies must foster a healthy, accountable market.” He urged students to explore further research into the socioeconomic impacts of this trend, noting that Tulane’s own Center for Corporate Governance is launching a new grant program aimed at studying the effects of privatization on workforce stability and regional economies.

The audience responded enthusiastically, with several alumni expressing a desire to collaborate on research projects with the professor. The discussion also led to a promising partnership with the Louisiana Economic Development Authority, which is looking to study how the state’s businesses can balance growth with public accountability.

What Comes Next

While Dr. R. did not predict a reversal of the trend, he stressed that the market is not static. “We might see a resurgence of public companies if regulatory costs decline and if we can better harness technology to reduce disclosure burdens,” he concluded. He urged policymakers to keep the conversation alive, warning that a further shrinkage of the public market could erode the very foundations of the American economic system—capital allocation, corporate responsibility, and investor protection.

For Tulane University, the lecture was more than an academic exercise; it was a reminder that the university’s role extends beyond teaching to shaping the future of corporate governance. By spotlighting the decline of public companies and offering evidence‑based policy recommendations, Dr. Jonathan K. R. has positioned Tulane at the forefront of a critical national dialogue—one that will shape the way businesses operate, invest, and ultimately, thrive.