Company ‘Death Rate’ on the Rise

Half of the companies in the S&P 500 will be gone in 10 years. That’s according to new data from Innosight. In 1985, large-cap stocks spent an average of 33 years in the index. By 1990, it was down to a 20 year average—and it’s predicted to be down to just 14 years by 2026. The shifts are being driven by two key areas: merger & acquisition activity and startups achieving high valuations faster than ever. It’s important to keep in mind that the turnover isn’t necessarily a bad thing, as old companies are getting replaced with more successful ones. Companies to join the list in the last eight years include Facebook, Trip Advisor, PayPal and Netflix, while notable companies to get the boot include JC Penney, Sprint, Radio Shack and The New York Times. (Business Insider, 9.22.17)