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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

#141

Post by eries »

hellllllllooo wrote: post #83
adrianmonk wrote: post #45

Earlier quoted context omitted.

That certainly the goal, but I think the question being asked is whether these rule changes are sufficient to achieve it. I do feel like that make a good point about voting power. If I own a stock, and it can go up 5% now, is the promise of additional voting power later on a valuable enough thing to make me not care about that 5%? It's possible I'm in it for the long term growth, so maybe I don't care about the 5%, b…

Exactly. To make it a long term stock market there needs to be some incentives that make it so and imo the ones stated don't seem enough to deter short term thinking. Maybe there are some other rules that aren't listed in the article.

Stay tuned

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

#142

Post by rcMgD2BwE72F »

eries wrote: post #128

Hey everyone, Eric Ries here, founder and CEO of LTSE (and also you may remember me from such roles as the Lean Startup guy). Day one of approval has been kind of exhausting with all the attention but I wanted to stop by this thread and say hello. Have questions? Happy to answer as best I can. Keep in mind that this is a highly-regulated startup so we are sometimes limited in what we can say publicly. I’ll do my best…

Will it be possible for listed companies to prohibit short-selling of their stocks?

Edit: If so, I'm pretty sure Tesla Inc. would be happy to participate in your beta program.

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

#143

Post by eries »

crediblewitness wrote: post #134
eries wrote: post #128

Hey everyone, Eric Ries here, founder and CEO of LTSE (and also you may remember me from such roles as the Lean Startup guy). Day one of approval has been kind of exhausting with all the attention but I wanted to stop by this thread and say hello. Have questions? Happy to answer as best I can. Keep in mind that this is a highly-regulated startup so we are sometimes limited in what we can say publicly. I’ll do my best…

Have you seen any interest from companies who are already traded on existing stock exchanges from delisting there and being listed on the LTSE?

Yes. (Technically “delisting” is not the right verb to describe this, but you’re on the right track.) The rules also will allow companies to dual list across LTSE and other exchanges.

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

#144

Post by eries »

rcMgD2BwE72F wrote: post #142
eries wrote: post #128

Hey everyone, Eric Ries here, founder and CEO of LTSE (and also you may remember me from such roles as the Lean Startup guy). Day one of approval has been kind of exhausting with all the attention but I wanted to stop by this thread and say hello. Have questions? Happy to answer as best I can. Keep in mind that this is a highly-regulated startup so we are sometimes limited in what we can say publicly. I’ll do my best…

Will it be possible for listed companies to prohibit short-selling of their stocks? Edit: If so, I'm pretty sure Tesla Inc. would be happy to participate in your beta program.

No

Some of the standards we hope to file in the future could affect the volume of shares available for short activity, but that would be an indirect consequence of encouraging longer holding periods.

Edit: indeed. But we don’t do anything to help with CEO tweeting :)

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

#145

Post by matt4077 »

immichaelwang wrote: post #5

What are the downsides of this?

It could be a medium-sized waste of resources.

The central thesis is somewhere between "controversial" and "improbable".

To wit: current markets being too focussed on the short term does not align too well with Uber, a company bound to lose money for at least another three to five years under the best assumptions, being valued as it is.

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

#146

Post by EnderViaAnsible »

ianai wrote: post #70
Animats wrote: post #53

Earlier quoted context omitted.

Here's the exchange rulebook.[1] This is rather long. I haven't found the "long term" part yet. It appears to function as an ordinary short-term exchange. It's not like stocks trade once a minute or once an hour to eliminate high-speed trading. They allow day trading and margin. There have been proposals for exchanges designed to discourage short term churn, but this doesn't seem to be one of them. The web site seems…

Fta:”The new exchange would have extra rules designed to encourage companies to focus on long-term innovation rather than the grind of quarterly earnings reports by asking companies to limit executive bonuses that award short-term accomplishments. It would also require more disclosure to investors about meeting key milestones and plans, and reward long-term shareholders by giving them more voting power the longer the…

I don't blame our OP for wanting more information. Certainly anything trumpeting the zeitgeist or offering a suspiciously tuned Worry De Jour should be evaluated carefully. (That is, it's obvious that "we want to fix short term ism in the stock market" will be a popular and marketable idea, whether that is the intention/actual end result or not.)

Even in the parts you've quoted, the language seems very careful.

They'll "ask" businesses not to give huge executive bonuses, but asking is free and non-binding. A large portion of the American public has been "asking" for this for a long time. Is the problem really that no one has asked?

They'll require "more information" about key milestones and plans for investors, which sure, that's nice for investors, or will be if it's more information than is usually given by CEOs to a board, which I doubt. (Investors already demand to know what the plan is, and even startups usually have plans for several years out even if they're goals more than plans.)

But is that actually the problem that causes short term ism? Are we insinuating that investors love long term investments and the only reason they don't make them is because CEOs don't tell them enough?

Etc. Now, maybe these worries are invalid, and the actual charter does actually prescribe effective regulations to solicit the desired behavior.

But to confirm that, we will need more information than the vague assertions provided in the article. Which is why our OP was trying to investigate the source documents.

(Also, doesn't it seem odd that a medium length article about an exchange's sole reason for existence contains almost no information about how that exchange intends to achieve the reasons for which if exists? Just assertions that it will do so with all language carefully qualified?)

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

#147

Post by elliekelly »

thaumasiotes wrote: post #103
elliekelly wrote: post #100

Earlier quoted context omitted.

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.

If lottery tickets were intended to be investments instead of a tax on poor people who can’t do math, yes.

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

#148

Post by defertoreptar »

eries wrote: post #128

Hey everyone, Eric Ries here, founder and CEO of LTSE (and also you may remember me from such roles as the Lean Startup guy). Day one of approval has been kind of exhausting with all the attention but I wanted to stop by this thread and say hello. Have questions? Happy to answer as best I can. Keep in mind that this is a highly-regulated startup so we are sometimes limited in what we can say publicly. I’ll do my best…

What are the key differences between a LTSE and a regular one?

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

#149

Post by DennisP »

eries wrote: post #128

Hey everyone, Eric Ries here, founder and CEO of LTSE (and also you may remember me from such roles as the Lean Startup guy). Day one of approval has been kind of exhausting with all the attention but I wanted to stop by this thread and say hello. Have questions? Happy to answer as best I can. Keep in mind that this is a highly-regulated startup so we are sometimes limited in what we can say publicly. I’ll do my best…

I like this plan a lot. One criticism that seems valid is that giving more voting power to people who've held stock longer gives a large advantage to founders. It also doesn't directly accomplish the goal of giving more power to people who intend to hold stock longer (though at least it tends to).

A more direct idea proposed by Vitalik Buterin: give people a vote in proportion to how long they're willing to commit to keeping their stock. Optionally, only enforce the commitment when the vote goes their way (though this probably only works for major decisions).

Would something like this be feasible for stocks? Would it be compatible with LTSE?

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

#150

Post by eries »

DennisP wrote: post #149
eries wrote: post #128

Hey everyone, Eric Ries here, founder and CEO of LTSE (and also you may remember me from such roles as the Lean Startup guy). Day one of approval has been kind of exhausting with all the attention but I wanted to stop by this thread and say hello. Have questions? Happy to answer as best I can. Keep in mind that this is a highly-regulated startup so we are sometimes limited in what we can say publicly. I’ll do my best…

I like this plan a lot. One criticism that seems valid is that giving more voting power to people who've held stock longer gives a large advantage to founders. It also doesn't directly accomplish the goal of giving more power to people who intend to hold stock longer (though at least it tends to). A more direct idea proposed by Vitalik Buterin: give people a vote in proportion to how long they're willing to commit to…

Yes, that’s feasible and even today a company could adopt a system like that (instead of one where certain insiders automatically have complete voting control for life).

We are considering a range of proposals for future listing standards and I won’t be able to comment on those until we file them publicly.

But suffice to say we are thinking along these lines. To me, one key principle is that in order for companies to make long-term decisions, they have to know who their long-term investors are, and find ways to be aligned with them, including via rewards like you propose.

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