Uber, Airbnb, WeWork, Palantir, Snapchat — these are some of the most well-known members of the new class of multi-billion dollar businesses that just refuse to go public.

These companies aren’t alone either.

According to a new note from JPMorgan Asset Management, the number of publicly-listed companies is near historic lows, down 46% from its peak of 8,025 in 1996.

Listed U.S. company count is down 46% from peak. (Image: JP Morgan Asset Management) More

Why don’t companies want to go public anymore?

JPMorgan pins it down to three things: “First, according to a study at the University of Florida, the cost of going public is high, with underwriting and registration costs estimated at around 14% of the funds raised.” Essentially, investment bankers are taking more and more of the money that companies raise in an IPO, reducing the attractiveness of this option for raising money. JP Morgan notes that financial institutions that are involved in running IPOs have had to deal with an “increasing regulatory burden,” so it may not just be bankers gouging businesses. The latter would be easier to reverse, and banks would have an incentive to do so too; increasing volume by lowering fees could still produce more revenue.

The second reason: “Market volatility.” Companies don’t mind seeing big spikes after going public, but many have seen their stock prices go the opposite way within a year of going public. Just ask GoPro (GPRO), Twitter (TWTR), Fitbit (FIT), or Box (BOX), all of which are 50%-90% down from their peaks since going public.

Lastly, it’s simply cheaper and easier to raise huge amounts of money without going public nowadays. After all, interest rates have been at all-time lows over the past six years. It isn’t necessarily that these companies are borrowing more instead of going public either; instead, JPMorgan notes that “this has resulted in more companies opting to sell themselves.” Bigger companies are able to borrow money easily and buy these smaller ones essentially. The former gets lows interest rates, while the latter makes money for its investors, without having to go through the turmoil of public markets; it’s a win-win.

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Rayhanul Ibrahim is a writer for Yahoo Finance.

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