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Is the Stock Market Disappearing?

Discussion in 'Too Hot for Swamp Gas' started by wgbgator, Oct 30, 2023.

  1. wgbgator

    wgbgator Premium Member

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    https://www.theatlantic.com/ideas/archive/2023/10/private-equity-publicly-traded-companies/675788/

    We already have dark money taking over politics, now it might be taking over the economy.
     
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  2. citygator

    citygator VIP Member

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    Funny. 2 out of the last 4 companies i worked for were run by dark money... aka private equity firms. Some cons but a lot of pros to not being public.
     
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  3. wgbgator

    wgbgator Premium Member

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    Seems like the cons are the pros (or vice versa) depending on how you look at it
     
  4. WarDamnGator

    WarDamnGator GC Hall of Fame

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    It would be interesting to know how many of those 1000s of companies that are no longer listed have been bought by private equity, as opposed to bankruptcy, mergers, etc ....

    Also, 1996 might not be a great place to start the study since there were a ton of "dot com" busts from that era, that either closed, or got bought out for pennies.

    But still, it's an interesting article. To some extent you'd think new IPOs would somewhat offset the bankruptcies and mergers to keep that number stable.
     
  5. exiledgator

    exiledgator Gruntled

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    Yeah - consolidations / M&A was my knee jerk thought as well.

    I do think it's easier for start ups to go the private equity route in many ways, and there's much more of that available nowadays.

    Probably a combination of the two, but stock markets aren't going anywhere - they're too lucrative. They'll just become more and more challenging for the individual to "win" by the rules as they are today.
     
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  6. wgbgator

    wgbgator Premium Member

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    How do you think this affects people's 401k/retirements, since so much savings is tied to the market?
     
  7. WarDamnGator

    WarDamnGator GC Hall of Fame

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    It's hard for me to think of a large quality company that went private ... Twitter might be the most famous, but they were not much of a profitable company ... Burger King, too, I think. I bet most 401k money is in "large cap" mutual fund type investments that are not going away. But people missing out on new/small but fast growing companies is probably going to hurt long term. I think my 401k, back when I used to have one, did offer a "small cap" fund that they labeled as "high risk."
     
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  8. G8trGr8t

    G8trGr8t Premium Member

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    Buffett buying everything, and seemingly getting more aggressive to increase margins. Installed new CEO at successful company, changed accounting rules that will depress current earnings which impacts price to buyout the rest of the company. Billionaires suing billionaires. Bet Haslem never thought Buffett would try something like this

    maybe the general consolidation of companies is the issue if you are just looking at the number of companies listed.

    MSN

    Berkshire changed the accounting practices at Pilot this year after it acquired control of the company. The lawsuit that was unsealed Thursday said that change is artificially depressing Pilot’s reported earnings, which are used to set the purchase price Berkshire agreed to pay in 2017.
    “Berkshire is intent on using the accounting change to justify grossly underpaying Pilot (the Haslam family) for its 20% interest,” the lawsuit said
     
    Last edited: Oct 30, 2023
  9. exiledgator

    exiledgator Gruntled

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    I don't think it changes much for the bogleheads that DCA into index funds or targeted funds.

    I think it's harder for the casual retail stock trader as there's less access to start ups and those that are public have a lot of head winds with targeted short attacks and the like.
     
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  10. dangolegators

    dangolegators GC Hall of Fame

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    It used to be you had to sell stock to raise money to start/run a company. Now you just find some billionaires.
     
  11. dangolegators

    dangolegators GC Hall of Fame

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    To me it would seem to generally increase them. The supply of stocks has declined but the demand for them presumably hasn't. But I don't know what other factors are at play.
     
  12. Gatorrick22

    Gatorrick22 GC Hall of Fame

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    Now do Cryptocurrency...
     
  13. docspor

    docspor GC Hall of Fame

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    [​IMG]
     
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  14. l_boy

    l_boy 5500

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  15. l_boy

    l_boy 5500

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    10.1 Pushdown accounting.
     
  16. l_boy

    l_boy 5500

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    For various reasons, especially Sarbanes Oxley (SOX) reporting for public companies has become more rigourous, after Enron and other firms that faked their financials. Lots of internal controls are required that are resource intensive. For that reason many smaller companies would rather not have that burden and would just assume stay private.