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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

#51

Post by thaumasiotes »

eanzenberg wrote: post #48
elamje wrote: post #42

Earlier quoted context omitted.

> Of course, I do think it can serve a useful purpose, but there is reason early-stage, private investment is restricted to qualified investors. The expected value of early stage investing is certainly higher than lotteries in the US. Every poor Joe can spend thousands on lottery tickets that expire worthless, but cannot invest thousands in real companies that Joe believes will do very well in the future. Shouldn't J…

Yes, and he can become an accredited investor which has regulations tied around it. Safeguards are needed so your Average Joe doesn't squander his family's $500k retirement and become dependent on the govt's teat.

Wouldn't those safeguards be at least as necessary for lottery tickets?

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

#52

Post by nerdponx »

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.

And what are those rules? Nowhere in the article does it actually say what this actually is.

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

#53

Post by Animats »

evrydayhustling wrote: post #40

Anybody have a good, technical/professional doc on how the LTSE mechanisms work? Some of this seems crazy, but smart people have looked at it. Example: It seems like stock transfer would reset voting rights, which should depress prices and (intentionally, I think?) discourage sale. But what keeps a fund that owns vested shares from effectively selling their economics and voting rights through a secondary contract?

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 unhelpful. Not much solid info.

[1] https://longtermstockexchange.com/regulation/docs/LTSE%20Rul...

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

#54

Post by eanzenberg »

thaumasiotes wrote: post #51
eanzenberg wrote: post #48

Earlier quoted context omitted.

Yes, and he can become an accredited investor which has regulations tied around it. Safeguards are needed so your Average Joe doesn't squander his family's $500k retirement and become dependent on the govt's teat.

Wouldn't those safeguards be at least as necessary for lottery tickets?

Only degenerates throw $500k away at lottery tix, while significant amounts of the population invest their entire $500k in funds as found in 401k's or IRAs (or whatever). So yeah, I'd rather shield most of the country from the volatility of early stage shitfests, and make that bar high to climb if they really truly want to invest in early-stage.

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

#55

Post by fallingfrog »

Why don’t we just levy a 5% tax on every stock trade? That would provide a lot of funding and also get rid of front running, flash crashes, and a lot of kinds of market manipulation in a hurry. It would also make sure that any stock trade was with the intent of making longer term investments.

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

#56

Post by [deleted] »

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?

[deleted]

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

#57

Post by bethly »

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?

This approval is just a first step; we intend to augment (subject to SEC approval) the exchange's listing rules with those innovations.

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

#58

Post by adventured »

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…

> 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, $4.1m in 3Q96, $8.5m in 4Q96, $16m in 1Q97.

They raised $50x million in the IPO, and had a $560 million valuation at the end of the first day of trading.

Their S1:

https://www.nasdaq.com/markets/ipos/filing.ashx?filingid=124...

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

#60

Post by maxander »

reasonablemann wrote: post #59

I think it's worth it to allow this but I fail to see it's true relevance. If companies don't innovate sufficiently for the long term they will die to other companies that do. Hence the market takes care of itself.

Shareholders aren’t incentivized to act in the company’s long-term interest; only to maximize apparent growth for as long as they hold the company’s shares. This leads to companies making shortsighted moves that aren’t in their long-term interest, due to shareholder influence.
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