Public Markets

Challenges

Significant burdens of the current IPO market, leading companies to stay private longer and concentrating wealth creation in private markets.

Definition

Financial markets where investments are traded on exchanges and easily invested in by the public, allowing companies to unlock capital from a wide pool of investors and giving private investors a chance to realize profit from their original investment.

Key Trends

Dominance of Index Investing, Options Markets serving as complex prediction markets.

Characteristics

Liquid, open marketplace for shareholders, greater price discovery, quicker access to capital, subject to rigorous disclosure requirements, involve numerous middlemen (stock exchanges, brokers, investment banks).

Regulatory Need

Critical need for regulatory clarity to allow institutional players into the Crypto space.

Modernization Efforts

Integration of tokenized securities into core markets, shift towards 24/5 trading.

Examples of Asset Classes

Company stocks, mutual funds, ETFs, bonds.

Global Equity Market Value (2021)

$124 trillion.

Alternative Avenues to Public Markets

Direct Listing model, use of SPVs.

2021

Ongoing

2025

Most individual investors will be familiar with public markets. Public markets are financial markets where investments are traded on exchanges and easily invested in by the public. Examples of traditional asset classes include company stocks, mutual funds, ETFs, and bonds. [...] Most individual investors will be familiar with public markets. Public markets are financial markets where investments are traded on exchanges and easily invested in by the public. Examples of traditional asset classes include company stocks, mutual funds, ETFs, and bonds. [...] Public markets are where companies go to unlock capital from a wide pool of investors and give private investors a chance to realize profit from their original investment. Many of the world's largest, well-known companies – think Apple and Amazon – are listed on public markets.

As this is a ‘public’ market, anyone can purchase shares in a company which is listed on the market. Companies can only enter the market to raise capital when they have satisfied a range of criteria set by the market regulator. They must then continue to disclose information to remain a listed or ‘public’ company. Public markets are described as ‘liquid’ markets, as there is an open marketplace for shareholders to dispose of, or sell, their shares, at their own discretion when desired. [...] Public markets are much larger than private markets. Global equity markets’ value was estimated at $124 trillion for 2021 versus $10 trillion for private markets, according to SIFMA and McKinsey. But private markets have been growing in size — and at a faster rate than public markets — as alternative assets have demonstrated outperformance of traditional ones, and as new asset classes emerge and evolve.

A visit to a public market often offers insight into local life. With a diverse range of stalls and booths, offering everything from groceries to artisanal goods to prepared foods, often alongside opportunities for activities and demonstrations, these markets are community hubs. Many of these 10 public markets — nominated by an expert panel and voted by readers as the best in the U.S. — also occupy historic landmark buildings, providing even more insight into the area's past. [...] Dive into the Santa Barbara Public Market’s food hall, where sweet meets savory and light collides with hearty. Indulge in authentic noodle bowls, Thai street food, traditional deli sandwiches, Mexican ceviches, artisan pizzas, and fresh sushi. Refresh with farmers market salads, juicy burgers, and crispy fries. Ready for dessert? Treat yourself to organic ice cream in unique flavors. Plus, unwind in the beer garden with over 30 craft beers, local wines, and handcrafted cocktails. [...] No. 10: Easton Public Market ## No. 10: Easton Public Market This public market is an outgrowth of Easton Farmers' Market, the oldest, continuous open-air market in the United States. The Public Market enhances that experience with a demonstration kitchen and community room, along with artisanal food vendors. So, you can take a class on how to use those gorgeous mushrooms, strawberries, and hand-carved meats you just picked up. No. 9: Findlay Market ## No. 9: Findlay Market

To give a balanced view, both public and private market liquidity need consideration. Public markets are classed as being liquid. It means that assets can easily be exchanged for cash or sold. This liquidity allows for greater price discovery as well as quicker access to capital. Because of their status, it also means that public companies are subject to much greater and more rigorous disclosure requirements than private companies are. [...] This is where most companies raise funding through the issuance of stock. The stock exchange is the best-known public market. It is where individuals, as well as institutional investors (think banks and hedge funds), buy and sell stocks. There are other public markets such as the bond market and the commodities market. For many types of investors equity allocations dominate. This includes pension funds, individual traders, and investors. ## Private Markets [...] The first key difference relates to the role that intermediaries play. In the public market arena, the process of buying and selling securities involves numerous middlemen such as stock exchanges, brokers, and investment banks. Typically, private markets have fewer intermediaries. The reason for this is that private markets are more often than not dominated by large institutional investors. This type of investor has the resources to invest directly in companies. ### Regulation