U.S. regulators approve the Long-Term Stock Exchange • Hacker News Board

Re: U.S. regulators approve the Long-Term Stock Exchange

#11

Post by miohtama » Fri, May 10, 2019, 10:01 PM UTC

jorts wrote: post #8

To be a company that's operationally mature enough to list on an exchange they're likely of the size of a company that could IPO on NYSE or Nasdaq. I don't think this will suddenly allow a flurry of startups to suddenly become public on a different exchange.

What is a flurry startup and what is a mature company is relative.

For example, Amazon originally IPO'ed in 1999 after raising only 10M USD.

Especially since the last financial crisis over regulation has hindered SMEs access to the public markets. Being a public company means that you can often raise money on better terms. If only large enterprises can access good money, then SMEs and indirectly innovation is hurt.

EU has realized this and is now trying to make SME listing easier (mostly through de-regulation).

> Currently, out of the 20 million SMEs in Europe, only 3,000 are listed on stock-exchanges. "We want to change this," said Valdis Dombrovskis, EC vice-president responsible for financial services: "We propose rules that will make it easier for SMEs to access to a wide range of funding at all stages of their development and to raise capital on public markets."

http://europa.eu/rapid/press-release_IP-19-1568_en.htm

https://www.eubusiness.com/news-eu/sme-financing.24fl/

Re: U.S. regulators approve the Long-Term Stock Exchange

#12

Post by jorts » Fri, May 10, 2019, 10:02 PM UTC

miohtama wrote: post #11

jorts wrote: post #8

To be a company that's operationally mature enough to list on an exchange they're likely of the size of a company that could IPO on NYSE or Nasdaq. I don't think this will suddenly allow a flurry of startups to suddenly become public on a different exchange.

What is a flurry startup and what is a mature company is relative. For example, Amazon originally IPO'ed in 1999 after raising only 10M USD. Especially since the last financial crisis over regulation has hindered SMEs access to the public markets. Being a public company means that you can often raise money on better terms. If only large enterprises can access good money, then SMEs and indirectly innovation is hurt. E…

I meant operationally mature as in they have the financial controls, auditing and reporting to be public. That's not trivial for a company to do, especially a startup.

Re: U.S. regulators approve the Long-Term Stock Exchange

#13

Post by throwaway2048 » Fri, May 10, 2019, 10:05 PM UTC

segmondy wrote: post #10

jayp wrote: post #3

Earlier quoted context omitted.

I am happy for LTSE. The article doesn't explains what makes LTSE different than NYSE? How will it actually encourage looking beyond the next quarter? Where can one learn about that?

It's designed for long term investing. Not a place for day traders, high frequency trading and all sorts of sharks and piranhas that like to eat up pensions and 401k funds...

What exactly stops them from investing anyways

Re: U.S. regulators approve the Long-Term Stock Exchange

#14

Post by miohtama » Fri, May 10, 2019, 10:06 PM UTC

jorts wrote: post #12

miohtama wrote: post #11

Earlier quoted context omitted.

What is a flurry startup and what is a mature company is relative. For example, Amazon originally IPO'ed in 1999 after raising only 10M USD. Especially since the last financial crisis over regulation has hindered SMEs access to the public markets. Being a public company means that you can often raise money on better terms. If only large enterprises can access good money, then SMEs and indirectly innovation is hurt. E…

I meant operationally mature as in they have the financial controls, auditing and reporting to be public. That's not trivial for a company to do, especially a startup.

It is not trivial, but it is not unheard of. There is a fixed minimum cost on the compliance and it must offset the better price you get from public money or reputational benefits of being public. The trick is make sure that this cost is low as possible, but still ensuring the markets' integrity and fairness.

* Quality information is available for investors to make rational investment decisions

* Information is available fairly - no insider trading

Re: U.S. regulators approve the Long-Term Stock Exchange

#15

Post by caprese » Fri, May 10, 2019, 10:06 PM UTC

Is this more than a Regulation ATS approval?

If this is a national stock exchange, then that would be fitting for silicon valley and California. If bankers here would like to take other parts of the transaction for IPOs and direct listings it could really be a boon for the state and remove a lot of the pressure from New York investment banks, as California is economically larger than other most countries with relevant financial centers. On many lists, California is only in 5th place GDP worldwide because the United States as a whole is above it and double counts California.

Re: U.S. regulators approve the Long-Term Stock Exchange

#16

Post by wmf » Fri, May 10, 2019, 10:08 PM UTC

jorts wrote: post #8

To be a company that's operationally mature enough to list on an exchange they're likely of the size of a company that could IPO on NYSE or Nasdaq. I don't think this will suddenly allow a flurry of startups to suddenly become public on a different exchange.

There's a huge narrative to the contrary, saying that companies like Uber are waiting to IPO until long after they are operationally mature.

Re: U.S. regulators approve the Long-Term Stock Exchange

#17

Post by throwaway2048 » Fri, May 10, 2019, 10:08 PM UTC

yohann305 wrote: post #4

jayp wrote: post #3

Earlier quoted context omitted.

I am happy for LTSE. The article doesn't explains what makes LTSE different than NYSE? How will it actually encourage looking beyond the next quarter? Where can one learn about that?

i found more info here, hope it helps: https://blog.ltse.com/how-ltse-will-and-will-not-be-like-oth...

This gives zero detail about how LTSE will actually be meaningfully different.

Re: U.S. regulators approve the Long-Term Stock Exchange

#18

Post by miohtama » Fri, May 10, 2019, 10:08 PM UTC

jayp wrote: post #3

bethly wrote: post #2

We are thrilled that the SEC has officially approved the Long-Term Stock Exchange as a national securities exchange!

I am happy for LTSE. The article doesn't explains what makes LTSE different than NYSE? How will it actually encourage looking beyond the next quarter? Where can one learn about that?

If this exchange is mostly for value investing, as it sounds like, what barriers will LTSE set to prevent high frequency trading and other byproducts of access focused trading?

Re: U.S. regulators approve the Long-Term Stock Exchange

#19

Post by logicx24 » Fri, May 10, 2019, 10:15 PM UTC

dmix wrote: post #9

> emphasize governance standards like sustainability, executive pay, and diversity What would a company gain by choosing to list on here (over other far more established options) while having to commit to these additional rules? Access to a group of investors who don't complain too much about quarterly profit objectives?

And a group of investors who don't complain about founders retaining majority voting power.

Re: U.S. regulators approve the Long-Term Stock Exchange

#20

Post by topspin » Fri, May 10, 2019, 10:28 PM UTC

throwaway2048 wrote: post #17

yohann305 wrote: post #4

Earlier quoted context omitted.

i found more info here, hope it helps: https://blog.ltse.com/how-ltse-will-and-will-not-be-like-oth...

This gives zero detail about how LTSE will actually be meaningfully different.

Indeed there is very little. Just some mumble mouthing about "intentions."

""But unlike those exchanges, ultimately our intention is that when companies list shares on LTSE for sale to the public, they will adopt a set of governing practices that are designed to help them build lasting businesses and empower long term-focused shareholders.""

Utterly indistinguishable from the Wooden Language heard from every such grandee.

I am not one to indulge the sort of naivety that might allow me to pretend that powerful investors are going to tolerate any more impediments to their desires than legally required, or at least enforceable, so unless there are concrete differences imposed by SEC et al. I expect this is -- or eventually will be -- simply Wall Street West.