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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

#91

Post by opportune »

basicplus2 wrote: post #63
immichaelwang wrote: post #5

What are the downsides of this?

opening up the opportunity to take money from a whole new source, by accepting money from unsophisticated investors who dont understand what they are getting into and losing liquidity on their investment at best and losing their money at worst

As long as investors don’t get bailed out, who cares? I would have loved to invest in Uber, Lyft, etc back in 2014 when I knew they were going to be big. It also would have sucked to invest in Yik Yak, but you win some you lose some. As long as they are selective enough to not list outright scams, I say let people take their own risks.

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

#93

Post by acct1771 »

Animats wrote: post #53
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…

Maybe they're looking for companies to list there who are trying to build value in the long term instead of the norm, which is short term vesting cashouts.

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

#94

Post by dmak »

xiphias2 wrote: post #7
immichaelwang wrote: post #5

What are the downsides of this?

It looks like founders and VCs get the majority voting shares by default. It's not clear if it's good for the company or not, but it helps founders to pick it as the stock exchange to go to. The slow vesting shedule makes a lot of sense though.

Where did you read about the slow vesting schedule

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

#95

Post by memmcgee »

baybal2 wrote: post #43
mises wrote: post #39

Earlier quoted context omitted.

> I myself vehemently oppose the idea of collective ownership of means of production, which public companies embody I wouldn't call this "public" ownership, as the "public" does not own a company. Investors own a company, the pool of investors is simply enlarged such that the public may invest.

In my understanding, collective ownership !== public ownership and is just anything where the amount of owners is > 1

No that's still private ownership. Amazon, for example, is not collectively owned, even though it's owned by more than just Jeff Bezos.

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

#96

Post by memmcgee »

conanbatt wrote: post #86

I think there is big potential value in a new exchange that optimizes for cheap IPO'ing rules. Something between Nasdaq and Wefunder. I'm not persuaded by some of the ideas they have (like adding diversity to their governing board, seems designed to be exclusive to tech-startups that already have a bias toward that "value"). But if only by competition they make listing cheaper and easier it could have a big impact.

>I'm not persuaded by some of the ideas they have (like adding diversity to their governing board, seems designed to be exclusive to tech-startups that already have a bias toward that "value").

What on Earth does this mean?

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

#97

Post by hellllllllooo »

im3w1l wrote: post #87
hellllllllooo wrote: post #24

I 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…

People worry that execs game the metrics investors use to evaluate stock. To give an example close to home, imagine if tech companies were evaluated by how many lines of code they produce per quarter. Now people are scared that execs will tell people to just write a bunch of whatever. Making the company look good on paper (short term stock gains) but actually worse (perform worse in the long term as those lines don't…

I agree. I just don't understand how the rules described in the article actually incentive it. I get that they're small step towards it but they don't seem enough.

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

#98

Post by xiphias2 »

dmak wrote: post #94
xiphias2 wrote: post #7

Earlier quoted context omitted.

It looks like founders and VCs get the majority voting shares by default. It's not clear if it's good for the company or not, but it helps founders to pick it as the stock exchange to go to. The slow vesting shedule makes a lot of sense though.

Where did you read about the slow vesting schedule

https://www.cnbc.com/2019/05/10/sec-approves-new-silicon-val...

The interview with Eric Ries is a bit clearer than the article, but it still misses a lot of details.

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

#99

Post by rando444 »

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.

Your comment assumes that all investors are the same and all companies share the same goal.

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

#100

Post by elliekelly »

dev_throw wrote: post #69
eanzenberg wrote: post #54

Earlier quoted context omitted.

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.

Then make them take some tests to get accredited rather than an arbitrary income barrier, or net worth gatekeeping. According to that logic, someone with $2M net worth is just as likely to lose their shirt as someone with $50k net worth if they put their entire worth into a losing fund.

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.

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