Who are all these companies that die off so soon after their "public births" in the market? Probably not any you've heard of.
They are companies like Ultimate Escapes, a luxury travel club that held its IPO in 2007, but filed for bankruptcy protection in late 2010. Or Southern USA Resources, a natural resources exploration company that first traded in 2009, reaching prices near $3,000 per share before falling to 3 cents a share and dropping off the market in 2013.
Many more companies barely learned to walk before being gobbled up by larger corporations, although the authors did not include such "deaths" by a merger or acquisition in their analysis.
"Even though the acquired company might cease operations as an independent entity, its business might remain largely intact," said Alexander Borisov, one of the authors of the paper from the Journal of Financial and Quantitative Analysis. "Many of the relevant parties, such as shareholders and creditors, for instance, might also fare well in such events."
A similar pattern of company mortality showed up in a CNBC analysis of data from the Bureau of Labor Statistics, which tracks private sector establishments. In that data set, a company opening up a new branch would count as a new establishment, even if it is part of a larger firm.
Unlike public companies, which are presumably already fairly successful by the time they file for an IPO and probably have a cushion of backing to get them through the early years, the privately owned companies that make up most of the private sector are more likely to fail in their first few years.
Only about 1 in 5 establishments survive for 20 years or more—that's even worse than the probability of surviving an infection with the Ebola virus.