The Corporate Bankruptcy Boom

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Companies are slowly going extinct, but they seem to be doing it in the worst way possible…

A report by Harvard found that between the mid 1990s and the mid 2020s the number of listed corporations halved at the same time that their profits doubled creating less competition in an overall much larger market.

At the same time 2025 just capped off a year with the highest levels of major corporate bankruptcies since the Global Financial crisis, and it only did this after beating out 2024 which ALSO had the highest level of corporate bankruptcies since the GFC.

Even amongst the largest companies on earth the turnover has never been higher outside of a major market downturn. For most of the 20th century companies spent an average of 30 years in the S&P 500 once they made it into that club… today it’s down to just 14 years.

Now all of this isn’t necessarily a bad thing…. Technology, taste, consumer AND investor preferences all change, and good companies should not necessarily be trying to last forever.

What’s more is that the rate of new business FORMATION is also at a record high, which sounds good, but if you are able to look into the data you will unfortunately see that this increased business churn rate isn’t going to help new business owners, it won’t help consumers, it CERTAINLY won’t help workers, and ironically enough, it won’t even help existing shareholders either…