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The Long-Term Stock Exchange Comes to Life

blog.ltse.com

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Re: The Long-Term Stock Exchange Comes to Life

#61

Post by felipeko »

whack wrote: post #16

"Tenured shareholder voting power, meaning that a shareholder’s votes would be proportionately weighted by the length of time the shares have been held" I wonder if we're going to see the rise of holding companies just to get around this rule. "Our holding company owns shares in XYZ, and will never sell those shares ever. Instead of buying/selling XYZ directly, you can instead buy/sell shares in our holding company.…

Having more control would be valuable, and thus, more expensive. You will have to pay more in order to have more control, while you could pay less and earn the same.

It appears to me that it will, at least, make more expensive to think short term than long term, and that is the intended incentive of this stock exchange (as you could as well just buy more shares if you want more control).

Re: The Long-Term Stock Exchange Comes to Life

#62

Post by bsaul »

eries wrote: post #29

Hey everyone, Eric Ries here. I’m the founder and CEO of the LTSE (and also the Lean Startup guy). Happy to see the discussion here and will try and answer a few questions. Unfortunately, a lot of the details of how the LTSE works are subject to regulatory approval, so I can’t share too much while we are working out the details with them. Still, I’ll do my best to answer. Thanks for the comments and happy new year

I had a similar idea (x) a few years ago, but leading this kind of project is way beyond my capabilities. I'm thrilled to see people try to accomplish this, and you seem to have a fantastic team, congrats.

(x) My first idea was to create a market where you couldn't resell a stock until some (long) time has passed. Pretty much the exact opposite of algorithmic trading trying to pass orders at light speed. Another was to forbid any kind of option (not stock options, options) or any other indirect way of speculating over a stock. The idea was to try to ensure the stock owners that someone wouldn't be able to crash the stock of a company he doesn't have any interest in, just for profit.

All of those considerations stemmed from the 2008 crash of course, and all the irrational behaviors that followed. But i still think there should be a way to provide a "safer" place for business owners to attract new shareholders.

Re: The Long-Term Stock Exchange Comes to Life

#63

Post by eries »

qubex wrote: post #60
eries wrote: post #29

Hey everyone, Eric Ries here. I’m the founder and CEO of the LTSE (and also the Lean Startup guy). Happy to see the discussion here and will try and answer a few questions. Unfortunately, a lot of the details of how the LTSE works are subject to regulatory approval, so I can’t share too much while we are working out the details with them. Still, I’ll do my best to answer. Thanks for the comments and happy new year

Do your rules correctly handle ownerships that cannot be modelled as acyclical directed graphs (ACGs) ( i.e. ownership hierarchies with loops in them)?

Our rules follow existing SEC rules for beneficial ownership; they tend not to take a very CS-centric view of things :)

Re: The Long-Term Stock Exchange Comes to Life

#64

Post by eries »

lrmunoz wrote: post #55
eries wrote: post #29

Hey everyone, Eric Ries here. I’m the founder and CEO of the LTSE (and also the Lean Startup guy). Happy to see the discussion here and will try and answer a few questions. Unfortunately, a lot of the details of how the LTSE works are subject to regulatory approval, so I can’t share too much while we are working out the details with them. Still, I’ll do my best to answer. Thanks for the comments and happy new year

Hi Eric, are you using the Lean Startup methodology to develop this? It seems to me you're trying to solve a very big problem directly, and there is less room for iteration... Would you say that when the LTSE opens in 2018 it is an MVP and iteration will start?

Yes and yes

Re: The Long-Term Stock Exchange Comes to Life

#65

Post by eries »

bsaul wrote: post #62
eries wrote: post #29

Hey everyone, Eric Ries here. I’m the founder and CEO of the LTSE (and also the Lean Startup guy). Happy to see the discussion here and will try and answer a few questions. Unfortunately, a lot of the details of how the LTSE works are subject to regulatory approval, so I can’t share too much while we are working out the details with them. Still, I’ll do my best to answer. Thanks for the comments and happy new year

I had a similar idea (x) a few years ago, but leading this kind of project is way beyond my capabilities. I'm thrilled to see people try to accomplish this, and you seem to have a fantastic team, congrats. (x) My first idea was to create a market where you couldn't resell a stock until some (long) time has passed. Pretty much the exact opposite of algorithmic trading trying to pass orders at light speed. Another was…

Nice

Re: The Long-Term Stock Exchange Comes to Life

#66

Post by [deleted] »

eries wrote: post #29

Hey everyone, Eric Ries here. I’m the founder and CEO of the LTSE (and also the Lean Startup guy). Happy to see the discussion here and will try and answer a few questions. Unfortunately, a lot of the details of how the LTSE works are subject to regulatory approval, so I can’t share too much while we are working out the details with them. Still, I’ll do my best to answer. Thanks for the comments and happy new year

[deleted]

Re: The Long-Term Stock Exchange Comes to Life

#67

Post by csdreamer7 »

whack wrote: post #16

"Tenured shareholder voting power, meaning that a shareholder’s votes would be proportionately weighted by the length of time the shares have been held" I wonder if we're going to see the rise of holding companies just to get around this rule. "Our holding company owns shares in XYZ, and will never sell those shares ever. Instead of buying/selling XYZ directly, you can instead buy/sell shares in our holding company.…

> I suppose one way to prevent this loophole is to grant voting power only to individuals, and not entities, but that would screw over index-funds, mutual-funds, foundations, non-profit-endowments etc etc.

Why not just block organizations that sell such a service as above be denied the benefit from increasing voting shares? Why ban all organizations instead of the ones trying to game it?

Re: The Long-Term Stock Exchange Comes to Life

#68

Post by IgorPartola »

phkahler wrote: post #50
whack wrote: post #16

"Tenured shareholder voting power, meaning that a shareholder’s votes would be proportionately weighted by the length of time the shares have been held" I wonder if we're going to see the rise of holding companies just to get around this rule. "Our holding company owns shares in XYZ, and will never sell those shares ever. Instead of buying/selling XYZ directly, you can instead buy/sell shares in our holding company.…

Your concern is only the tip of the iceberg. Any set of rules will be gamed. The only way I can think of (and it can probably be gamed) that would really put the long term into the executives mind is to have most of their compensation based on the value of the company a few years after they're done. But given the existence of options and shorting stocks and any number of ways to mitigate risk or make money that don't…

I read somewhere about splitting control and ownership, but really you can’t. You either own a thing or you don’t. Time shares notwithstanding.

I do like dividend paying stock, but is that not a form of short term thinking? “May me my dividend this quarter, I don’t care when happens next year!”

Re: The Long-Term Stock Exchange Comes to Life

#69

Post by kbenson »

qubex wrote: post #59
nickparker wrote: post #19

Earlier quoted context omitted.

Nowhere near a lawyer here, but: Would it be possible to contractually obligate any entities holding these stocks to also adopt tenured shareholder voting power? Doing so would certainly improve the loophole situation, though I suspect it doesn't fix it entirely... Things probably get weird when you nest tenure effects.

I don’t see how that could work generally . Sure, it might be possible to enforce by-laws when making a sale/purchase (but extra obligations would inevitably drive down the sale price), but what of situations in which collateral shares are foreclosed upon, they are inherited, or other non-voluntary transfers of ownership? What if one day they ended up even temporarily in the hands of a government (for example, the It…

> for example, the Italian government’s property and assets cannot by law by encumbered in such a manner

Well, depending on the country the LTSE is based in, and whether that law is honored through some trade agreement signed into law in that country, I imagine what the Italian government thinks about the issue is moot.

> what of situations in which collateral shares are foreclosed upon, they are inherited, or other non-voluntary transfers of ownership?

I'm wondering if they have or are considering a grace period where if the shares are reacquired within that period the voting rights remain the same. I imagine they definitely wouldn't want the rights transferred in the case of foreclosure.

Inheritance is an interesting one, but then again, it's only a problem if you take the view that your assets should all be transferred to your relatives on death. As with inheritance taxes, there are competing incentives. Maybe shares under a certain quantity could transfer over with voting weight intact, or maybe they should just lose half their time-based voting weight (or just have the time halved, which might still leave them in the top tier of voting weight).

There's lots of ways to structure it to achieve certain goals. I'm sure some would see new case law made.

Re: The Long-Term Stock Exchange Comes to Life

#70

Post by qubex »

eries wrote: post #63
qubex wrote: post #60

Earlier quoted context omitted.

Do your rules correctly handle ownerships that cannot be modelled as acyclical directed graphs (ACGs) ( i.e. ownership hierarchies with loops in them)?

Our rules follow existing SEC rules for beneficial ownership; they tend not to take a very CS-centric view of things :)

Does that mean that you do not speak of ownership in terms of a weighted graph of nodes, or that indeed your rules do break down when there is a possibility of circular references?
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