Amid the economic turmoil initiated by the pandemic, United States major stock exchanges have continued to dominate the global equity market. Despite the dominance, major U.S. exchanges are delisting companies due to a range of factors.
According to data acquired by Finbold, a total of 179 companies have been delisted from the major U.S. exchanges between 2020 and 2021. In 2021, the number of companies on Nasdaq and the New York Stock Exchange stands at 6,000, dropping 2.89% from last year’s figure of 6,179. In 2019, the listed companies stood at 5,454.
NYSE recorded the highest delisting with companies on the platform, dropping 15.28% year-over-year from 2,873 to 2,434. Elsewhere, Nasdaq listed companies grew 7.86% from 3,306 to 3,566. As of 2021, Nasdaq had 2,819 listed domestic companies, while foreign entities stood at 747. NYSE accounts for 1,848 domestic companies, with the foreign entities standing at 586.
The emergence of alternative markets potentially driving delistings
The report highlights some of the factors impacting the listing and delisting of companies on the U.S. stock exchanges. According to the research report:
“Furthermore, the delisting on U.S. major exchanges might be due to the emergence of new alternative markets, especially in Asia. China and Hong Kong markets have become more appealing, with regulators making local listings more attractive. Over the years, exchanges in the region have strived to emerge as key players amid dominance by U.S. equity markets.”
Over the past, the number of foreign companies listing on U.S. exchanges also surged. Generally, the U.S. has dominated the global equity market with companies aiming to gain liquidity, high potential to raise capital as legitimacy.