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There’s lots to worry about as we enter the New Year, not least a newly emboldened and militarily active U.S. There are also things to worry about in the financial markets, even as the various indices trade at or near record levels. Much of the recent run-up in market valuations is due to investor enthusiasm for artificial intelligence (AI). Some commentators worry that the current investor AI enthusiasm may prove to be a bubble – that is, that valuations have gotten out of whack and that infrastructure investment have run far ahead of any possible (or profitable) need. Some (including me) are concerned that things could get messy if investors sour on AI or lose confidence or patience.

One of the possible consequences from an AI bubble burst could be a wave of corporate and securities litigation. A lawsuit filed earlier this week against the start-up AI energy support company Fermi, which just completed an IPO in October, may suggest what post AI-bubble litigation might look like. A copy of the complaint can be found here.Continue Reading Worried About a Possible AI Bubble Burst?

According to Renaissance Capital (here), in the heady days during the two-year period 2020 and 2021, 618 traditional U.S. IPOs were completed, raising over $220 billion. (These stats do not include SPAC IPOs). By contrast, in the period 2022-2023 YTD, there have only been 171 traditional U.S. IPOs completed, raising just $27 billion. While many market observers yearn for a return of the buoyant IPO market that prevailed two years ago, signs are that it could be a while before the IPO market takes off again. As detailed in a November 14, 2023, Wall Street Journal article about the state of the IPO market, and as discussed below, there are a host of concerns weighing on the IPO market.Continue Reading It Could be a While Before a Buoyant IPO Market Returns

green_stock_tickerAs I have noted previously on this site, there are many fewer publicly traded companies in the United States now than there were within past decades. I have noted this phenomenon primarily within the context of observing that while the annual number of securities class action lawsuits has remained broadly stable within a range, the number of public companies has declined, suggesting that the average likelihood of any company getting hit with a securities suit has increased over  time (as discussed here). This often-overlooked observation is important, but it doesn’t address the more fundamental question of why there are so many fewer publicly traded companies than there once were. A recent academic paper documents the decline in the number of publicly traded companies and suggests several possible reasons for the decline. I have my own thoughts, as well. As discussed further below, these decline in the number of listed companies has important implications for the economy generally and for the D&O insurance marketplace in particular.
Continue Reading Yes, But WHY Are There So Many Fewer Publicly Traded Companies?