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

reuters.com

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

#101

Post by elliekelly »

conanbatt wrote: post #86

I think there is big potential value in a new exchange that optimizes for cheap IPO'ing rules. Something between Nasdaq and Wefunder. I'm not persuaded by some of the ideas they have (like adding diversity to their governing board, seems designed to be exclusive to tech-startups that already have a bias toward that "value"). But if only by competition they make listing cheaper and easier it could have a big impact.

Several studies[1] have found that gender diversity on boards is correlated with reduced risk of fraud.

[1] https://www.ft.com/content/cdb790f8-c33d-11e4-ac3d-00144feab...

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

#102

Post by elliekelly »

rb808 wrote: post #41

I can imagine some kind of OTC exchange where people dont have to worry about Sarbane-Oxley and other SEC rules as being useful. Is this what it will be? If you have to comply with SEC and the CEO can't post jokes on twitter, I dont really see what advantage there is over NYSE or NASDAQ.

The SEC has jurisdiction over all publicly-traded companies and exchanges and will have the same authority over LTSE as they do NASDAQ & NYSE.

And SarbOx has nothing to do with CEO tweets... a CEO can’t provide materially misleading information to shareholders or potential shareholders. Period. Not on twitter, not on TV. Not in the rain, not on a train.

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

#103

Post by thaumasiotes »

elliekelly wrote: post #100
dev_throw wrote: post #69

Earlier quoted context omitted.

Then make them take some tests to get accredited rather than an arbitrary income barrier, or net worth gatekeeping. According to that logic, someone with $2M net worth is just as likely to lose their shirt as someone with $50k net worth if they put their entire worth into a losing fund.

It’s not about knowledge, it’s about the amount of risk and the amount at risk. Two equally skilled investors each looking to invest $10,000 in the same company. Investor A is worth $10,000,000 while Investor B is worth $100,000. Those two investments look the same on paper but the risk for each investor is wildly different. A test won’t solve for that.

I don't think you have a good sense of who's buying how many lottery tickets. By your measure here, amount invested as percentage of net worth, the lottery should definitely be illegal.

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

#104

Post by sideshowb »

mises wrote: post #38
tmugavero wrote: post #6

Excited to see this. I hope it leads to a trend to listing sooner and giving access to retail investors much earlier. Buying Uber at a few dollars instead of $42 for example. The markets will operate like they want to unless there are explicit rules to stop it. Right now it's wait to IPO as long as possible, and HFT only accessible to huge companies. Retail is left with the scraps.

Retail is left with "the scraps" because it is much riskier to invest early on. Companies that fail early aren't heard about as much, because Joe Average's pension plan hasn't invested in them, but are still plentiful. And maybe Joe Average's pension plan shouldn't be investing in what are effectively PE-stage firms. I don't know if I'm right about this, but it seems such an exchange might contribute to something lik…

2008 wasn't about the common man making poor investment choices. It was about banks extending credit to people who weren't credit worthy, but pretending to their investment customers that they were.

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

#105

Post by baybal2 »

adamsea wrote: post #89
baybal2 wrote: post #43

Earlier quoted context omitted.

In my understanding, collective ownership !== public ownership and is just anything where the amount of owners is > 1

Does that mean you oppose all companies or business which are owned by more than a single person?

Yes

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

#106

Post by miohtama »

adventured wrote: post #58
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…

> For example, Amazon originally IPO'ed in 1999 after raising only 10M USD. Small correction, Amazon's IPO was in May 1997. The $10m in venture capital is correct though ($2m common, $8.2m preferred). They of course had a relatively small business, which matches with the $10m in VC and times. $15.7m in sales for fiscal 1996. Their sales ramp is impressive considering the Web at the time: $875k in 1Q96, $2.2m in 2Q96,…

Thank you! This was long long time ago and I did not fact check my memories.

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

#107

Post by verall »

trophycase wrote: post #64
bufferoverflow wrote: post #62

Earlier quoted context omitted.

A Joe Average is legally allowed to walk into a casino and lose all his money, pretty much guaranteed over long term. A Joe Average is legally allowed to play all kinds of lotteries, pretty much guaranteed loss over long term. A Joe Average is legally allowed to invest his 401k in the riskiest penny stock one can find. This has nothing to do with risk, it's 100% gate keeping.

Yep, penny stocks, options and margin trading are all available to a retail investor. But hey, I want to invest in a new business? I want to buy Bitcoin? I want to participate in an ICO? Sorry. It's all about gatekeeping and not letting me do what I want with my money.

I don't like the gate keeping either but so called "entrepreneurs" would just go around washing people. The point is that you have enough money so no-one cares that the space mining company you invested in only hires website designers. Pumping penny stocks is illegal, but when it wasn't, salespeople were washing people.

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

#108

Post by hamandcheese »

The title of the story is “U.S. regulators approve new Silicon Valley stock exchange”

Despite the actual name of the exchange, the title of the article seems much closer to how the exchange is described:

> The LTSE is a bid to build a stock exchange in the country’s tech capital that appeals to hot startups, particularly those that are money-losing and want the luxury of focusing on long-term innovation even while trading in the glare of the public markets.

From the HN guidelines:

> Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize.

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

#109

Post by integrate-this »

I remember when a bunch of nobel prize winning economists founded "Long-term Capital Management" on the theory that, because they only traded relative value arbitrage, they couldn't lose money. Then they levered the strategy without realizing that these value arbitrages could shift against them and result in additional margin requirements. Those were the smartest people in finance at that time, and they nearly took down the world's financial system. The only real similarity here is the "long-term" name, but I don't think that anyone with a true understanding of capital markets would name their firm "long-term" after that fiasco.

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

#110

Post by sayrer »

integrate-this wrote: post #109

I remember when a bunch of nobel prize winning economists founded "Long-term Capital Management" on the theory that, because they only traded relative value arbitrage, they couldn't lose money. Then they levered the strategy without realizing that these value arbitrages could shift against them and result in additional margin requirements. Those were the smartest people in finance at that time, and they nearly took d…

so, your argument is that using the phrase "long-term" is forever poisoned?

doesn't seem super strong.

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