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Absolutely the wrong interpretation of this decision. Read the June 1 "Money Stuff" instead.
If you're referring to an article that's online, it would be helpful to link to it. It would appear to be this one: https://www.bloomberg.com/opinion/articles/2023-06-01/ai-bot...
But yes, I think that's the one.
Is it just me, or are newspaper articles surprisingly difficult to read? From what I understand: 1. Instead of a traditional IPO, Slack went public through an alternative process called a direct listing. 2. As part of its direct listing, Slack sold some million "registered" and some million "unregistered" shares. 3. What are registered and unregistered shares? I could not find an explanation on Wikipedia. 4. Fiyyaz P…
Read Matt Levine’s newsletter today, he breaks it down better than anyone.
Is it just me, or are newspaper articles surprisingly difficult to read? From what I understand: 1. Instead of a traditional IPO, Slack went public through an alternative process called a direct listing. 2. As part of its direct listing, Slack sold some million "registered" and some million "unregistered" shares. 3. What are registered and unregistered shares? I could not find an explanation on Wikipedia. 4. Fiyyaz P…
I first came across this in Money Stuff[1], but the gist of it is, the unregistered shares came from employees selling their own shares. The reason it would not have happened with an IPO is because the employees would have been locked up. Everything else you said is correct. Now SCOTUS is saying that Pirrani cannot sue slack because he may not have bought shares directly from Slack. [1] https://www.bloomberg.com/opin…
7. Pirrani's suit relied on Section 11 of the Securities Act. This alleges that the company lied in its registration document.
8. In an IPO, all shares are covered by the registration document. In a direct listing, the current shareholders of the company just start trading their shares on the market one day.
9. Notably, a direct listing makes it unclear which shares are registered (covered by the registration document) and which are unregistered. According to SCOTUS, Pirrani can't tell, so he can't prove standing under Section 11.
10. He should have sued the company under Section 10 of the Securities Act instead. This is the same mechanism used against "mature" companies. Lawyers don't like to sue under Section 10 because of reasons.
Some stuff which is still unclear to me:
1. People speak of owning n shares of a company. I always thought this was simply shorthand for something like: "I own shares #1034852, #1092647, and #2986246".
2. People sometimes own 0.25 shares of a company, but I thought that this was a convenience invented by stock brokers like Fidelity and Robinhood.
3. If each share is associated with a share number, and people only hold whole shares in principle, then isn't the provenance of that share clear? Whether it is registered or not should simply be a matter of following it back in time?
Earlier quoted context omitted.
I first came across this in Money Stuff[1], but the gist of it is, the unregistered shares came from employees selling their own shares. The reason it would not have happened with an IPO is because the employees would have been locked up. Everything else you said is correct. Now SCOTUS is saying that Pirrani cannot sue slack because he may not have bought shares directly from Slack. [1] https://www.bloomberg.com/opin…
Thanks! From the added context: 7. Pirrani's suit relied on Section 11 of the Securities Act. This alleges that the company lied in its registration document. 8. In an IPO, all shares are covered by the registration document. In a direct listing, the current shareholders of the company just start trading their shares on the market one day. 9. Notably, a direct listing makes it unclear which shares are registered (cov…
> "Naturally, Congress remains free to revise the securities laws at any time, whether to address the rise of direct listings or any other development. Our only function lies in discerning and applying the law as we find it." I really don't see how anyone that actually reads Supreme Court decisions calls this court illegitimate. They are very consistent about not being a super legislature, no matter how disruptive th…
> "Naturally, Congress remains free to revise the securities laws at any time, whether to address the rise of direct listings or any other development. Our only function lies in discerning and applying the law as we find it." I really don't see how anyone that actually reads Supreme Court decisions calls this court illegitimate. They are very consistent about not being a super legislature, no matter how disruptive th…
The ruling that I, and most people, find to be damning is overturning Row. I don't give two shits about what you think of the actual issue. It doesn't matter if the previous ruling was wrong, the point of the courts ironically isn't to actually get it right but make a decision. After that the law has been interpreted and it's up to the legislature to say, "no I actually meant this." There is some room for exceptions on this but a split decision, split on party lines, and extremely tenuous reasoning, should be all the signal you need that you don't have the "this is fine because it's obviously wrong" to warrant an exception like this.
> "Naturally, Congress remains free to revise the securities laws at any time, whether to address the rise of direct listings or any other development. Our only function lies in discerning and applying the law as we find it." I really don't see how anyone that actually reads Supreme Court decisions calls this court illegitimate. They are very consistent about not being a super legislature, no matter how disruptive th…
> "Naturally, Congress remains free to revise the securities laws at any time, whether to address the rise of direct listings or any other development. Our only function lies in discerning and applying the law as we find it." I really don't see how anyone that actually reads Supreme Court decisions calls this court illegitimate. They are very consistent about not being a super legislature, no matter how disruptive th…
When jurisprudence and the law conflict, which one wins?
Earlier quoted context omitted.
I first came across this in Money Stuff[1], but the gist of it is, the unregistered shares came from employees selling their own shares. The reason it would not have happened with an IPO is because the employees would have been locked up. Everything else you said is correct. Now SCOTUS is saying that Pirrani cannot sue slack because he may not have bought shares directly from Slack. [1] https://www.bloomberg.com/opin…
Thanks! From the added context: 7. Pirrani's suit relied on Section 11 of the Securities Act. This alleges that the company lied in its registration document. 8. In an IPO, all shares are covered by the registration document. In a direct listing, the current shareholders of the company just start trading their shares on the market one day. 9. Notably, a direct listing makes it unclear which shares are registered (cov…
So for convenience sake, they don’t assign a unique share to you, because why make it so that you have to keep a complex record of a bunch of fungible things? (i.e. Uh oh, that specific share is being lent to a short seller, but the true owner wants to sell it).
In practice, he bought the right to be given a share of Slack, not a specific piece of paper.
His broker can prove they bought unregistered shares, but they’re not the plaintiffs here.
> "Naturally, Congress remains free to revise the securities laws at any time, whether to address the rise of direct listings or any other development. Our only function lies in discerning and applying the law as we find it." I really don't see how anyone that actually reads Supreme Court decisions calls this court illegitimate. They are very consistent about not being a super legislature, no matter how disruptive th…
My, grandma, what large bad faith you have!