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The Long-Term Stock Exchange Comes to Life

blog.ltse.com

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51–60 of 191 posts

Re: The Long-Term Stock Exchange Comes to Life

#51

Post by toast0 »

choxi wrote: post #21

Can someone tell me if this idea is crazy? I've noticed that fundraising and liquidity are common problems for startup founders, and it seems to me that the public stock market could solve many of those problems. What if all startups were publicly traded entities right after incorporation? Some of the benefits you would gain as a founder: - A larger pool of potential investors. You would have access to investment fro…

There is a market for this, the OTC or pink sheets. At initial listing and if the company itself or its insiders or affiliates are selling, there are required financial disclosures.

I think there's resistance to public trading however because it generally requires more structured accounting (GAAP vs cash accounting), and invites external scrutiny and pressure.

Re: The Long-Term Stock Exchange Comes to Life

#53

Post by eries »

ChuckMcM wrote: post #43

I like it conceptually but I'm not sure how different it is from schemes where the founders have 10x voting rights to big chunks of stock (like Facebook and Google). These companies, from a voting perspective, can't get bullied by activist share holders but it doesn't help. The pressure on stock price and its desirability comes in part from using it as compensation (it goes up and your employees with ISOs stick aroun…

That’s a good observation. Today’s Dual class systems only protect the founders from a specific kind of short-term pressure. But there are still thousands of employees overreacting to volatility and jumping at shadows. Our rules are designed to address the full “user experience” of being an employee in a public company, with the goal of aligning the whole enterprise towards more Long-Term goals.

Re: The Long-Term Stock Exchange Comes to Life

#54

Post by marcrosoft »

This is terrible.

> Through brand new listing standards, software tools, and advocacy, we’re reinventing the public company experience with novel approaches to executive compensation, shareholder voting, disclosure practices, board and stakeholder policies, and community governance.

None of this reduces short term trading. Even if it did, reducing short term trading would make for a less efficient market and prolong bubbles.

Re: The Long-Term Stock Exchange Comes to Life

#55

Post by lrmunoz »

eries wrote: post #29

Hey everyone, Eric Ries here. I’m the founder and CEO of the LTSE (and also the Lean Startup guy). Happy to see the discussion here and will try and answer a few questions. Unfortunately, a lot of the details of how the LTSE works are subject to regulatory approval, so I can’t share too much while we are working out the details with them. Still, I’ll do my best to answer. Thanks for the comments and happy new year

Hi Eric, are you using the Lean Startup methodology to develop this? It seems to me you're trying to solve a very big problem directly, and there is less room for iteration... Would you say that when the LTSE opens in 2018 it is an MVP and iteration will start?

Re: The Long-Term Stock Exchange Comes to Life

#56

Post by qubex »

eries wrote: post #35
hendzen wrote: post #25

Earlier quoted context omitted.

Yeah I expect these rules will be rendered effectively moot by equity swap trading.

Our rules handle derivatives correctly, including swaps. Otherwise it would be trivial to avoid the long-term vote weighting

What happens when stock is held by a shell company (or trust fund) and its property partially changes? What happens when one LTSE form buys up part of another LTSE firm that partially owned the first one to begin with?

(I assume that rules are built with ADG in mind, general constructs are far more involved.)

Re: The Long-Term Stock Exchange Comes to Life

#57

Post by qubex »

Most people seem to be concerned about ”gaming the rules” but are positing scenarios that can be modelled as acyclical directed graphs (ADG). I’m wondering if who framed the rules even thought of general directed graphs with potential cycles (company A owns shares of company B that owns shares of company C that owns shares of companies B and A). It would seem that most manners of computing seniority would fail in such situations because of the lack of unique, non-ambiguous ancestry (but I might be wrong).

Re: The Long-Term Stock Exchange Comes to Life

#58

Post by markvdb »

whack wrote: post #16

"Tenured shareholder voting power, meaning that a shareholder’s votes would be proportionately weighted by the length of time the shares have been held" I wonder if we're going to see the rise of holding companies just to get around this rule. "Our holding company owns shares in XYZ, and will never sell those shares ever. Instead of buying/selling XYZ directly, you can instead buy/sell shares in our holding company.…

Individual beneficial ownership as a criterium would widen your definition only somewhat. Plus you could give corporate shareholders non-voting shares I guess.

Re: The Long-Term Stock Exchange Comes to Life

#59

Post by qubex »

nickparker wrote: post #19
whack wrote: post #16

"Tenured shareholder voting power, meaning that a shareholder’s votes would be proportionately weighted by the length of time the shares have been held" I wonder if we're going to see the rise of holding companies just to get around this rule. "Our holding company owns shares in XYZ, and will never sell those shares ever. Instead of buying/selling XYZ directly, you can instead buy/sell shares in our holding company.…

Nowhere near a lawyer here, but: Would it be possible to contractually obligate any entities holding these stocks to also adopt tenured shareholder voting power? Doing so would certainly improve the loophole situation, though I suspect it doesn't fix it entirely... Things probably get weird when you nest tenure effects.

I don’t see how that could work generally. Sure, it might be possible to enforce by-laws when making a sale/purchase (but extra obligations would inevitably drive down the sale price), but what of situations in which collateral shares are foreclosed upon, they are inherited, or other non-voluntary transfers of ownership? What if one day they ended up even temporarily in the hands of a government (for example, the Italian government’s property and assets cannot by law by encumbered in such a manner). What then? The chain is broken.

Re: The Long-Term Stock Exchange Comes to Life

#60

Post by qubex »

eries wrote: post #29

Hey everyone, Eric Ries here. I’m the founder and CEO of the LTSE (and also the Lean Startup guy). Happy to see the discussion here and will try and answer a few questions. Unfortunately, a lot of the details of how the LTSE works are subject to regulatory approval, so I can’t share too much while we are working out the details with them. Still, I’ll do my best to answer. Thanks for the comments and happy new year

Do your rules correctly handle ownerships that cannot be modelled as acyclical directed graphs (ACGs) (i.e. ownership hierarchies with loops in them)?
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