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The Long-Term Stock Exchange Opens for Business

blog.ltse.com

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Re: The Long-Term Stock Exchange Opens for Business

#51

Post by yayr »

I wonder what the actual business model for the company is and how the incentives from this will affect the LTSE vision behind "long-term investing". As far as I have seen on the website the company runs various freemium SaaS products like captable.io, startuprunway.io and hiringplan.io. They obviously want or need to monetize on that.

edit links: - https://captable.io - https://startuprunway.io - https://hiringplan.io - https://fast409a.io - https://startupdisclosure.io - https://notegenie.io

Re: The Long-Term Stock Exchange Opens for Business

#52

Post by LatteLazy »

BiteCode_dev wrote: post #40

Genuine question, what good does the ability to buy and sell stock on the short term do for humanity ? Does it have any specific vertue appart from allowing one to make make money by betting correctly ? Why are not all sales required to be long term ?

It prevents capital being mis-allocated.

It turns out that is one of the most important things to do in modern, capital intensive, economies.

It also means people can invest for shorter periods and that means more capital is available for investment. This has a double bonus where it reduces the risk of investments again making more capital available...

Re: The Long-Term Stock Exchange Opens for Business

#53

Post by vikramkr »

dcolkitt wrote: post #29
picodguyo wrote: post #3

"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations." Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareho…

I'll give a shareholder's perspective. Management, when left unchecked, frequently engages in in wasteful empire building and prestige projects. The most apparent manifestation of this is in mergers and acquisitions. Decades of evidence shows that the median merger destroys shareholder value for the acquiring company. Imposing strong controls on corporate management is one of the most important thing that shareholder…

Management left unchecked just does what they're incentivized to do. You can't pass on the blame as shareholders when shareholders create incentive packages that reward getting a bonus today for an acquisition instead of not really getting paid for sustainably growing the business over the next decade.

Re: The Long-Term Stock Exchange Opens for Business

#54

Post by andreareina »

imagin8or wrote: post #17
Maximus9000 wrote: post #11

Earlier quoted context omitted.

Me too. According to the wiki page: > Operating principles: In an earlier SEC filing, LTSE said that its corporate governance rules might include: increased voting rights for shareholders who hold company stock for long periods of time, restrictions on offering short-term incentives to executives, disclosure of impact of any stock buybacks, and requiring companies to have a board-level long-term product and strategy…

So you make a fund which holds the stock of the listed company long-term, and trade the fund as normal... this doesn't seem robust yet.

In a prior post the founder claimed that there are ways to deal with that. After all, AIUI stocks in the States are already actually held by the Depository Trust Corporation, so the system already deals with indirection.

Re: The Long-Term Stock Exchange Opens for Business

#55

Post by cma »

dcolkitt wrote: post #29
picodguyo wrote: post #3

"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations." Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareho…

I'll give a shareholder's perspective. Management, when left unchecked, frequently engages in in wasteful empire building and prestige projects. The most apparent manifestation of this is in mergers and acquisitions. Decades of evidence shows that the median merger destroys shareholder value for the acquiring company. Imposing strong controls on corporate management is one of the most important thing that shareholder…

>the median merger destroys shareholder value for the acquiring company.

Median doesn't seem like the right metric. If you measured VC by median outcome I'm sure it looks like they always fail.

Re: The Long-Term Stock Exchange Opens for Business

#56

Post by pbhjpbhj »

mistrial9 wrote: post #46
dcolkitt wrote: post #29

Earlier quoted context omitted.

I'll give a shareholder's perspective. Management, when left unchecked, frequently engages in in wasteful empire building and prestige projects. The most apparent manifestation of this is in mergers and acquisitions. Decades of evidence shows that the median merger destroys shareholder value for the acquiring company. Imposing strong controls on corporate management is one of the most important thing that shareholder…

"go off the reservation" .. I suspect that my father many decades ago engaged in casual references like this, but I recall as a child that it was frowned upon by people who sought to reset and build positive relations between races in North America

Forgive me for straying OT:

It seems like a fact-based analogy. 'A group have been restrained to "territory", but a member has broken that restraint'. There doesn't seem inherently to be a judgement as to the restraint or the rogue being right/wrong.

I'd be interested in why you felt the usage was beyond the pale sufficiently that it needed to be reined in? The concept of territorial reservations doesn't appear to me to denigrate any group particularly; maybe I'm wrong in that?

Re: The Long-Term Stock Exchange Opens for Business

#57

Post by awinter-py »

yayr wrote: post #51

I wonder what the actual business model for the company is and how the incentives from this will affect the LTSE vision behind "long-term investing". As far as I have seen on the website the company runs various freemium SaaS products like captable.io, startuprunway.io and hiringplan.io. They obviously want or need to monetize on that. edit links: - https://captable.io - https://startuprunway.io - https://hiringplan.…

yuuuup

it feels like the third page in the godaddy checkout flow where it's like 'maybe you need our wordpress, email, and VPS hosting in order to launch your website'

also feels like a data grab. traditional exchanges don't collect this stuff, and the SEC doesn't collect most of it.

Re: The Long-Term Stock Exchange Opens for Business

#58

Post by howeyc »

AznHisoka wrote: post #36
pavlov wrote: post #14

Earlier quoted context omitted.

I don’t get it. There are already plenty of public companies that pay extremely predictable dividends. This is a popular investment type for retirement portfolios, among others. Why should they be on a separate exchange?

The dividend is not based on their cashflow. So if Apple is paying 1% dividend on a $100 stock price, but their cashflows increase every year, they're still paying you $1 every year. What I'm suggesting is an exchange where the dividend is a fixed % of their cashflows. Let's say it's 1%. If their cashflow is 1 billion, then 1% of it goes to their shareholders. If it doubles the next year, then 1% of that 2 billion go…

I'm not certain, but I think you just described a REIT.

Re: The Long-Term Stock Exchange Opens for Business

#59

Post by pbhjpbhj »

nicoburns wrote: post #6
picodguyo wrote: post #3

"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations." Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareho…

I have no idea if this solves the problem, but I think the problem is shareholders. Specifically, a proportion of shareholders favour short-term profits, and those shareholders outcompete the long-term minded shareholders leading them to have greater influence over time. These short-term shareholders are extracting value at the expense of wider society, and it's a massive problem.

The proportion being ~100%? Then they can move on and suck some other company dry.

Re: The Long-Term Stock Exchange Opens for Business

#60

Post by ethbr0 »

nicoburns wrote: post #6
picodguyo wrote: post #3

"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations." Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareho…

I have no idea if this solves the problem, but I think the problem is shareholders. Specifically, a proportion of shareholders favour short-term profits, and those shareholders outcompete the long-term minded shareholders leading them to have greater influence over time. These short-term shareholders are extracting value at the expense of wider society, and it's a massive problem.

On the other hand, short-term shareholders, inasmuch as they prefer returned capital, are then freed to invest in other businesses.

If PayPal et al. had retained profits in the business for a long term goal, a substantial number of innovate companies couldn't have formed.

The more nuanced problem is likely that short-term and long-term shareholders' goals are mutually exclusive. That is, there is a rarely a strategy that's optimal for both.

Coupled with the fact that some businesses (apps!) favor short-term strategies, while others (biotech!) favor long-term strategies.

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