When the US stock market is becoming exclusive: private trading is giving rise to more and more giant private enterprises, while ordinary individual investors are being shut out.

This year's largest "stock offering" globally did not take place on the New York Stock Exchange or on the big screen of Nasdaq. Instead, it was a private placement trade open only to less than 50 "named" investors. OpenAI completed a private financing round of up to $40 billion this year, a scale that not only overshadowed all IPOs this year, but exceeded more than $100 billion the largest IPO in history. However, this capital feast had nothing to do with the vast majority of American retail investors - participants included SoftBank, Blackstone, Coatue, and OpenAI CEO Sam Altman himself. This is not an isolated case, but rather a trend that is accelerating: the US capital market is moving from "mass participation" to "elite rich internal circulation." "The fastest growth" happens before the IPO, driving the birth of giant private companies In the past, going public was a crucial milestone in the development of tech companies. Companies raised funds and expanded through IPOs, while the public investors were able to share the early growth dividends. But this model is undergoing a fundamental change. An often overlooked but underestimated fact is that the number of public companies in the United States has been halved since the late 1990s peak. During the dot-com bubble, there were more than 8,000 public companies in the US capital market; today, that number is only about half of what it was then. At the same time, the time for companies to go public has been repeatedly delayed. Data shows that in 2000, the median "age" of companies going public was only 6 years, but now it has stretched to 14 years. In other words, by the time a company finally goes public, it has often completed the steepest part of its growth curve. When ordinary investors finally have access to these companies' stocks on the secondary market, they have often slowed down in growth, matured in business models, and their valuations have already been repeatedly raised. The exponential growth phase has already been "digested" in the private placement market. Companies are no longer rushing to go public, not because they lack money. On the contrary, the private placement market is providing unprecedented financial support. With lower disclosure requirements and more controllable equity structures, more and more companies are choosing to expand through targeted financing and internal trading. In the past two years, several star companies have experienced a monumental increase in valuation in the private placement market: - The humanoid Siasun Robot & Automation company, in which Bezos invested, saw its valuation soar from $26 billion to about $390 billion in less than two years, a 1400% increase. - Data analysis company Databricks, which was valued at about $62 billion in its last round of financing, has now been raised by the market to $100 billion. - OpenAI's first round of private financing reached a scale of $40 billion, setting a record. - SpaceX's latest valuation has reached $800 billion through a new round of employee stock repurchases and directed financing, doubling its valuation this summer. These value reassessments have almost all occurred before going public. Wealthy individuals are invited to get on board early while ordinary retail investors wait on the sidelines to "pick up the pieces" Theoretically, the US regulatory system sets a threshold for the private placement market. Investors need to be "accredited investors" as defined by the SEC, with a net worth of at least $1 million (excluding primary residence), or an annual income of at least $200,000 ($300,000 for couples). But in reality, this is just the first hurdle to enter the private placement world. The most sought-after transactions are often only open to a select few institutions, family offices, and long-term partners. Even if they meet the accredited investor criteria, they may not necessarily qualify to participate. On Wall Street, Morgan Stanley, JPMorgan Chase, and Goldman Sachs have established private placement market departments to conduct such business, with buyers typically being large asset management companies or institutional investors. Wealthy individual investors who are allowed to participate often invest through brokerage firms or family offices. For investors who miss out on targeted financing, they can only turn to the complex and expensive private secondary market, holding shares indirectly through structures such as SPVs, with both liquidity and transparency heavily discounted. In all cases, SpaceX may be the most symbolic representative of the "invite-only market." This space company founded by Musk has consistently refused to go public over the years, but has continuously raised its valuation through private placements and internal secondary trading. This summer, in a private stock transaction, SpaceX's valuation has risen to about $400 billion, with participants mainly being Musk's long-time supporters, early investors, and institutions named by the company. More symbolically, as reported by The Wall Street Journal, in a recent round of employee stock repurchases and directed financing, SpaceX's valuation could even be raised to $800 billion, potentially becoming the most valuable privately held company in US history. Even if SpaceX does choose to go public in the future - as rumored to be next year - ordinary retail investors can only gain entry after multiple rounds of value appreciation have taken place. The decisive phase of growth has already been allocated in the market closed to the public. Regulators' concerns: Market is "layered" This trend has already alerted regulators. SEC Chairman Paul Atkins bluntly stated that decades ago, companies like Intel and Apple went public early on, allowing the public to share in the rewards of the company's growth, whereas today, the most explosive growth stage is locked in the private placement market. In his view, the issue is not whether the market is open, but rather that the distribution mechanism for rewards is undergoing structural changes. On the surface, the US stock market remains highly open, and retail investors can still freely buy and sell various listed company stocks. However, at a deeper level, the capital market is quietly being reconstructed. Going public is no longer the start of growth, but more like the end of value release. In an age where a private placement market centered on "invitees" is expanding, ordinary retail investors are not officially excluded, but are increasingly absent from the most critical growth phases. This layered market structure is becoming a new reality that cannot be avoided in the US capital market. This article is translated from Wall Street See, author: Bu Shuqing, GMTEight Editor: Li Cheng.