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U.S. regulators approve the Long-Term Stock Exchange
21–30 of 200 posts
Re: U.S. regulators approve the Long-Term Stock Exchange
#22Earlier 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...
Pensions and 401k funds are not required to do any sort of short-run trading, and the asymptotic value of a security on each exchange will be the same. It won't meaningfully impact any sort of long run value of a pension fund or 401k (that is passively managed)
Re: U.S. regulators approve the Long-Term Stock Exchange
#23To 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…
There were times in India and Pakistan when every major city had a stock exchange. Pakistan held to tradition longer than India, and owners of 3 largest stock exchanges merged them into Karachi stock exchange, and later PSX only in 2016.
In Pakistan, most listed businesses are much more "boring" than ones in US. Concrete factories, brick makers, seedling producers, farms. Regulations on disclosure are near nil, but locals care not for that as few buy shares for anything but dividends and a good track record paying them.
I myself vehemently oppose the idea of collective ownership of means of production, which public companies embody, but I do think that there is a visible "skew" in US with regards to business liquidity: all kinds of pets.com have a go, while clearly not bad businesses reliably making money have to be sold at discounts that will be considered big even by developing countries standards.
Re: U.S. regulators approve the Long-Term Stock Exchange
#24I don't really see how the rules mentioned will change things that much.
> asking companies to limit executive bonuses that award short-term accomplishments.
Why would I care as an investor? I still want the stock to go up quickly. Executives own stock and without a cash bonus wouldn't this incentive trying to get quick increases in stock value.
> more disclosure to investors about meeting key milestones and plans, and reward long-term shareholders by giving them more voting power the longer they hold the stock
Seems relatively minor vs the benefits of a stock jumping significantly in a short time. As a minor stock holder I have no interest in voting power. There still isn't a downside to short term deals.
Re: U.S. regulators approve the Long-Term Stock Exchange
#25Earlier 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...
How exactly do you believe high-frequency traders "eat up" pension funds?
The only time any limit order gets executed is when it is the best price available. From the other perspective, the price a market order is matched at is the price of the best limit order available.
In the absence of high-frequency traders, the best price available will be worse, not better.
Re: U.S. regulators approve the Long-Term Stock Exchange
#26We 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?
The only concrete(ish) thing I could find was this quote:
> ...and reward long-term shareholders by giving them more voting power the longer they hold the stock.
I'm not sure how that would affect the behavior of traders in any particular stock. Seems like it would allow a "committed minority" of shareholders the ability to control the company, without having different classes of stock determined upfront?
In any case, Matt Levine's article on it is a good read: https://www.bloomberg.com/opinion/articles/2017-10-16/the-lo...
Re: U.S. regulators approve the Long-Term Stock Exchange
#27Kind of bad luck — naming anything in finance “long-term”. It attracts the attention of quite a few angry gods to smite you.
Some of us still remember what happened with LTCM — “Long-Term Capital Management” hedge fund, who was heralded back then as the pinnacle of innovation. It was back in 1998, which looks like eternity for Silicon Valley types... but some remember.
Naming a financial entity “LTSE” is inviting trouble.
Re: U.S. regulators approve the Long-Term Stock Exchange
#28> 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.
Which probably isn't an issue for retail investors. Retail investors are already unlikely to have much actual power and I would bet a majority of them never actually participate in any voting. I can't speak for everyone in that situation, but I know I would be perfectly happy to forfeit my stockholder voting rights if it meant I got some more assurances that a company was being held to some higher ethical standard.
Re: U.S. regulators approve the Long-Term Stock Exchange
#29> And the Council of Institutional Investors has argued (pdf) that LTSE’s voting mechanism could hurt shareholders by giving too much power to founders.
I mean, the most high-profile tech stocks to hit the market as of late already give all the power to founders via voting class stock, so I don't think it's a big change other than truly standardizing it.
Re: U.S. regulators approve the Long-Term Stock Exchange
#30I don't really see how the rules mentioned will change things that much. > asking companies to limit executive bonuses that award short-term accomplishments. Why would I care as an investor? I still want the stock to go up quickly. Executives own stock and without a cash bonus wouldn't this incentive trying to get quick increases in stock value. > more disclosure to investors about meeting key milestones and plans, a…
I think the presumption underlying the LTSE is that short-term growth is at the expense of more valuable long-term growth, so it's structured to try and encourage long-term growth. If you don't hold that view, then you won't invest in those companies.