Inside the invitation-only stock market for the wealthy

Subscribe to enjoy similar stories. This year’s largest stock sale wasn’t on the New York Stock Exchange or its uptown rival, the Nasdaq Stock Market. Instead, it was a $40 billion offering by OpenAI that was available to only the investors handpicked by the firm’s executive team, including Sam Altman himself.

Fewer than 50 investors snagged shares. For most Americans, the universe of stocks they can invest in is rapidly shrinking. The number of public companies in the U.S.

is half of its peak in the late 1990s.That’s not a problem for the rich. The ultrawealthy are able to buy and sell shares of the buzziest private companies via invite-only transactions long before they list their shares on public stock exchanges. That’s created a two-tier market.

One tier is a private club of sorts, where a privileged group can obtain shares of companies still in their early growth stages. Everyone else is left with older, slower-growing names. The dynamic is exacerbating the wealth disparity in the U.S., as the growth in the net worth of the richest Americans is far outpacing all other income groups.

Some policymakers and economists see this as an existential threat to the U.S. economy. The most powerful critic is the chairman of the Securities and Exchange Commission, Paul Atkins.

Atkins is trying to entice more companies to go public and trying to open up access to private markets to a much wider group of investors. Young companies like Intel and Apple decades ago sold shares to the public to raise money to hire employees, build factories and fund development of new products, Atkins says. “Insiders got returns, obviously, but the public really shared in those," Atkins said.