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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

#481

Post by joshu »

cmroanirgo wrote: post #478
bricemo wrote: post #452

Let me try to summarize everyone’s same question: - The idea of a stock exchange that allows companies and investors to focus on 5, 10, 25 year horizons sounds great! - However companies on normal stock exchanges now already try to do this, but it’s hard because of quarterly earnings, pressure for quarterly growth, etc - How is LTSE different? Seems like: Companies and investors “promise” to have a longer term focus…

I used to be part of the system that built machines that auto traded on arbitrage opportunities due to millsec/nanosec differences in reported prices in different exchanges. Although probably not popular I would suggest that long term stocks needs to incorporate features that actively block certain trading patterns: limit price changes, limit buy/ sell frequency, & disallow shorting. I have been heavily involved in t…

continuous trading isn't really necessary... could do a once a week or once a day crossing.

i feel like "more votes the longer you hold the stock" is also a mistake - it should be, your votes are higher weighted if you agree to a longer lockup. 10 year lockup, lots of votes. no lockup, very little...

Re: The Long-Term Stock Exchange Opens for Business

#482

Post by plantsbeans »

eries wrote: post #273
silentsea90 wrote: post #258

Earlier quoted context omitted.

Echoing what somebody else said, "open for business" feels a bit disingenuous from a retail investor perspective as there is no place to trade stocks, no sign up, no stocks listed etc. A more restricted announcement (read directly to companies) would probably have been a better idea to gain that critical mass. For reference, whenever Uber/Lyft "open for business" in a new city, they don't just flip the switch to enab…

I don't understand this criticism. We are actively trading stocks today: https://markets.cboe.com/us/equities/market_share/ You can call your broker right now and ask them to direct your orders to a specific exchange, including "L" on the SIP.

Apparently the overwhelming majority of HN audience doesn't really know how the basics of what a stock exchange functionally does (including myself). I'm starting from here, "Getting to Know the Stock Exchanges"...

https://www.investopedia.com/articles/basics/04/092404.asp

Anyway, maybe a good question for someone familar with the technical details - why is there so much volume already flowing through LTSE? Is it just arbitrarily included in some standard broker software application such that it doesn't make a difference to them? Since apparently there is already nearly as much volume traded on LTSE as there is through Nasdaq.

Re: The Long-Term Stock Exchange Opens for Business

#483

Post by lappa »

om2 wrote: post #473
lappa wrote: post #465

Earlier quoted context omitted.

IMO, the main difference between LTSE and a traditional stock exchange is the way votes are allocated to shareholders. Traditionally voting power is proportional to shares owned. However, on LTSE the amount of time a stock has been held is also considered. There is no minimum holding period, but there is an incentive to hold. A bit of a tangent: Since there is a premium in voting rights (GOOG vs GOOGL), I'm curious t…

That changed voting structure sounds interesting. I could not find any reference to this on the website. Where should I look for more info? Also, would this apply only to securities actually listed on LTSE or also, somehow, to non-LTSE listed securities bought on LTSE (which apparently is the only thing possible to do so far(.

The SEC supported the validity of LTSEs Voting Rights Policy [0]. Eric Reis has clarified time-phase voting won't be mandatory [1], however the LTSE is facilitating technological / legal support for the implementation of such voting structures without directly endorsing them (presumably for legal reasons) [2].

>Also, would this apply only to securities actually listed on LTSE or also, somehow, to non-LTSE listed securities bought on LTSE (which apparently is the only thing possible to do so far(.

Their rulebook disallows unfair dilution of other classes of shares.

[0] https://www.sec.gov/rules/other/2019/34-85828.pdf

>the Council of Institutional Investors (“CII”) advised that it could not support LTSE’s Form 1 application for two reasons. First, CII stated that the corporate governance requirements in LTSE’s Form 1 application (specifically, its “Voting Rights Policy”176) would “permit newly public companies to have multi-class structures with unequal voting rights in conflict with [CII’s] membership approved policies supporting a one share, one vote structure” with “no sunsets on such structures.”177 Second, CII stated that LTSE’s Form 1 application “does not include any information about LTSE’s reported plans to update its application to include time-phased voting rights as a core element of its proposed corporate governance listing standards.”178 In addition, CII set forth its concerns about time-phased voting rights, including disproportionate empowerment of long-term stakeholders and challenges in tracking ownership of those with super-voting rights.

>The issues raised in the CII Letter do not provide a basis for the Commission to reject LTSE’s Form 1 application. Commission rules do not mandate that the rules of a national securities exchange must provide for a “one share, one vote” requirement for listed issuers.

[1] https://qz.com/1901336/eric-ries-long-term-stock-exchange-ai...

[2] https://ltse.com/faq/

> No. The exchange’s rules do not take a position on enhanced voting rights for shareholders. Our software affiliate, LTSE Services, has designed a tool to facilitate enhanced voting, should a company choose on its own to implement that.

Re: The Long-Term Stock Exchange Opens for Business

#484

Post by lappa »

om2 wrote: post #476
lappa wrote: post #465

Earlier quoted context omitted.

IMO, the main difference between LTSE and a traditional stock exchange is the way votes are allocated to shareholders. Traditionally voting power is proportional to shares owned. However, on LTSE the amount of time a stock has been held is also considered. There is no minimum holding period, but there is an incentive to hold. A bit of a tangent: Since there is a premium in voting rights (GOOG vs GOOGL), I'm curious t…

Hmm, I even skimmed the rule filings and I can’t find any reference to this. Are you sure this is a rule they have in place?

https://news.ycombinator.com/item?id=24429196

Re: The Long-Term Stock Exchange Opens for Business

#485

Post by eries »

gsumpster wrote: post #471
eries wrote: post #99

PS. we are hiring: https://jobs.lever.co/ltse

I interviewed with the team not too long ago, didn't get the role in the end but the team was lovely and the interview process was great. Would recommend giving it a shot if you're at all interested, there are some great people working there!

Thank you for sharing. I’m delighted you had a good experience

Re: The Long-Term Stock Exchange Opens for Business

#486

Post by laughinghan »

bricemo wrote: post #452

Let me try to summarize everyone’s same question: - The idea of a stock exchange that allows companies and investors to focus on 5, 10, 25 year horizons sounds great! - However companies on normal stock exchanges now already try to do this, but it’s hard because of quarterly earnings, pressure for quarterly growth, etc - How is LTSE different? Seems like: Companies and investors “promise” to have a longer term focus…

This reminds me of an article on HN from earlier this year by a reviewer of grant proposals, about how often they receive applications that clearly describe the problem the applicant wants to solve, but don't describe an idea with which to solve it: https://billwadge.wordpress.com/2020/02/10/im-good-enough-im...

Re: The Long-Term Stock Exchange Opens for Business

#487

Post by laughinghan »

lostcolony wrote: post #469
bricemo wrote: post #452

Let me try to summarize everyone’s same question: - The idea of a stock exchange that allows companies and investors to focus on 5, 10, 25 year horizons sounds great! - However companies on normal stock exchanges now already try to do this, but it’s hard because of quarterly earnings, pressure for quarterly growth, etc - How is LTSE different? Seems like: Companies and investors “promise” to have a longer term focus…

'- How is LTSE different? Seems like: Companies and investors “promise” to have a longer term focus via planning' I don't think "promise" is the word. The fact the exchange says it's focused on long term, would incline companies that wanted to focus on long term to list themselves there. Likewise, it would incline customers to list themselves there. But what incentive is there for short term traders? Right now, on th…

all the incentives of the companies listing, and existing holders, are aligned to long term

Are they? In what way?

The only difference from a normal exchange appears to be that companies are "required to publish a series of policies". Why wouldn't that incentivize saying "the right things" in those policies but then otherwise behaving exactly the same as companies listed on a normal exchange?

it sounds like voting power is tied to how long you've held

This is not actually a requirement for companies listed on the LTSE, but even if every company implemented it, in practice surely shareholder voting power has negligible influence on company management compared to share price incentives?

Re: The Long-Term Stock Exchange Opens for Business

#488

Post by megameter »

cmroanirgo wrote: post #478
bricemo wrote: post #452

Let me try to summarize everyone’s same question: - The idea of a stock exchange that allows companies and investors to focus on 5, 10, 25 year horizons sounds great! - However companies on normal stock exchanges now already try to do this, but it’s hard because of quarterly earnings, pressure for quarterly growth, etc - How is LTSE different? Seems like: Companies and investors “promise” to have a longer term focus…

I used to be part of the system that built machines that auto traded on arbitrage opportunities due to millsec/nanosec differences in reported prices in different exchanges. Although probably not popular I would suggest that long term stocks needs to incorporate features that actively block certain trading patterns: limit price changes, limit buy/ sell frequency, & disallow shorting. I have been heavily involved in t…

I'm curious re the issue of shorting and fixing about your thoughts with respect to liquidity being a good. The derivatives tend to be justified as market liquidity boosters. But if we are intentionally aiming to move out the time horizon of trades, is there then a way to distinguish those techniques as "unhealthy liquidity"?

Re: The Long-Term Stock Exchange Opens for Business

#489

Post by laughinghan »

joshu wrote: post #481
cmroanirgo wrote: post #478

Earlier quoted context omitted.

I used to be part of the system that built machines that auto traded on arbitrage opportunities due to millsec/nanosec differences in reported prices in different exchanges. Although probably not popular I would suggest that long term stocks needs to incorporate features that actively block certain trading patterns: limit price changes, limit buy/ sell frequency, & disallow shorting. I have been heavily involved in t…

continuous trading isn't really necessary... could do a once a week or once a day crossing. i feel like "more votes the longer you hold the stock" is also a mistake - it should be, your votes are higher weighted if you agree to a longer lockup. 10 year lockup, lots of votes. no lockup, very little...

That's an interesting idea, but in practice surely shareholder voting power has negligible influence on company management compared to share price incentives?

Re: The Long-Term Stock Exchange Opens for Business

#490

Post by rocqua »

joshu wrote: post #481
cmroanirgo wrote: post #478

Earlier quoted context omitted.

I used to be part of the system that built machines that auto traded on arbitrage opportunities due to millsec/nanosec differences in reported prices in different exchanges. Although probably not popular I would suggest that long term stocks needs to incorporate features that actively block certain trading patterns: limit price changes, limit buy/ sell frequency, & disallow shorting. I have been heavily involved in t…

continuous trading isn't really necessary... could do a once a week or once a day crossing. i feel like "more votes the longer you hold the stock" is also a mistake - it should be, your votes are higher weighted if you agree to a longer lockup. 10 year lockup, lots of votes. no lockup, very little...

I like that voting idea a lot!
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