The number of non-financial public companies based in Alabama shrank from 15 in 2018 to 11 in 2026. The decline isn’t just happening in Alabama; it’s part of a national trend. Since the late 1990s, the number of public companies has shrunk by nearly 50%, according to Forbes.
“The number [of public companies] is going down overall, and Alabama never had that many large public companies or companies going public,” says Theresa Welbourne, Ph.D., entrepreneurship professor at the University of Alabama and executive director of the Alabama Entrepreneurship Institute. “There’s also a difference in having the headquarters office versus just a division of a large, public firm.”
There are a number of reasons for the shrinking number of public companies both in Alabama and nationwide, including an increase in mergers and acquisitions and other options for raising capital. Whatever the reasons, what matters most is how public companies (or the lack of public companies) affect the state and its economy.
“It’s a complicated issue,” says Patrick Murphy, Ph.D., professor and head of the Barefield Entrepreneurship Program at the University of Alabama at Birmingham. “Our state has a healthy business climate, but going public is not always an important part of their evolution.”
The Reasons Behind the Trend
Raising capital is the main goal for companies that choose to go public. So “if you can get large investments from private investors more easily than you can go public, many companies will,” Murphy says.
When companies do go through the process of an initial public offering (IPO) to be listed on a national stock exchange, they are then subject to a new level of auditing and complying with legal regulations, Murphy says. For many, it may be preferable to find other ways to raise capital, such as with private credit or venture capital.
Welbourne’s research shows that one potential concern for companies considering an IPO is “the high death rates” of public companies. “After five years, only about 50% are still alive and trading as their own original form,” she says.
She believes a main reason for the high death rate is that companies tend to “treat the IPO as a financial event, when it is also a major organizational change,” and her research shows that the change is often not managed well.
Merger and acquisition activity is another big reason for declines in public firms, Welbourne says. “Those companies may still be doing well and have a presence in Alabama, but the ticker symbol for the Alabama-based company goes away.”
For example, Hibbett, an Alabama-based company that went public in 1996, was acquired in 2024 by a British company, JD Sports Fashion. After the acquisition, Hibbett was delisted from the NASDAQ and operates as a private subsidiary under the JD Group.
Mergers and acquisitions don’t just lead to the delisting of formerly public companies; they also can prevent companies that might have gone public from ever taking that step. For example, if a small to midsize Alabama-based company gets bought by a major national player, that company no longer has a need to go public, Murphy explains.
“It’s not negative; it’s just the evolution of a national trend,” he says.
For a lot of firms, there are simply better options than going public, allowing them to save costs and avoid undue stress on the firm, Welbourne says.
How Important Are Public Companies to Our Economy?
Going public may not be the right move for every company, but being home to public companies can bring benefits to the state. “When you go public, you become a national-level company by default, which opens you up to much larger national investors and national talent,” Murphy says. “Those companies contribute taxes, jobs and exposure to their state, and we lose that when fewer companies go public.”
However, losing some national exposure and investment “is not going to make or break our business climate,” Murphy adds. “Just doing good, local business is enough. And the state is well-positioned for continued success.”
While it’s important to think beyond the state’s borders when building and growing businesses, the state’s economy will thrive best with a “good, healthy mix of public and private companies,” Murphy says. “You can’t sell your soul to global thinking, or you’ll sacrifice the mom-and-pop or legacy companies. It’s about a balance.”
The Future of Public Companies in Alabama
The state’s growing entrepreneurial ecosystem, which includes incubators and accelerators, is likely to lead to more IPOs and public companies based in Alabama, Welbourne says. The University of Alabama, for example, has its own pre-accelerator and accelerator, and just launched the Crimson Angel Network at Alabama.LetsPlayMoney.com.
These business-building resources are driving success. For example, the first company will launch on the angel platform this summer, and City Detect, one of the university’s accelerator companies, received $13.5 million in its Series A round of financing.
“There’s a definite rhythm to the economic life of a system like ours,” Murphy says. “Decline is part of a normal cycle of boom and bust, and we might see more of a dip, but the business climate is really good here. I expect the negative trend will level off and then start growing again. Alabama is a hidden gem, wide open for entrepreneurial business actions.”
In his conversations with investors and business leaders around the country, “the basic perception of Alabama is curiosity,” Murphy says. “If we have more exposure to the public markets, there are a lot of savvy people who can more quickly satisfy their curiosity about our state. National exposure can quickly transform into economic capital.”
Nancy Mann Jackson is a Madison-based freelance contributor to Business Alabama.
This article appears in the August 2026 issue of Business Alabama.
