Twilio, Asana to List on Long Term Stock Exchange(wsj.com)
wsj.com
Twilio, Asana to List on Long Term Stock Exchange
https://www.wsj.com/articles/twilio-asana-to-list-on-long-term-stock-exchange-as-esg-push-continues-11624565701
144 comments
https://archive.is/KzTDN
I can’t read the full article but:
> To list on LTSE in August, Twilio and Asana are agreeing to a slate of commitments such as aligning executive and board compensation with long-term performance; taking customers and employees into account; and explaining how the company’s board oversees its long-term strategy. These commitments must be concrete policies that can be monitored by LTSE.
If such agreements are broken what’s the punishment, other than presumably being dislisted? If there are none it seems like an empty platitude given that you can already buy both on the “regular” stock exchange.
Is daytrading prohibited? If not seems like it’s still bound by the same short term nonsense. I’d be impressed if you can only buy and sell on the LTSE once a year. Money being put where the mouth is and all that.
> To list on LTSE in August, Twilio and Asana are agreeing to a slate of commitments such as aligning executive and board compensation with long-term performance; taking customers and employees into account; and explaining how the company’s board oversees its long-term strategy. These commitments must be concrete policies that can be monitored by LTSE.
If such agreements are broken what’s the punishment, other than presumably being dislisted? If there are none it seems like an empty platitude given that you can already buy both on the “regular” stock exchange.
Is daytrading prohibited? If not seems like it’s still bound by the same short term nonsense. I’d be impressed if you can only buy and sell on the LTSE once a year. Money being put where the mouth is and all that.
The requirements are embodied in the listing standards of the exchange, and have enforcement mechanisms equivalent to other listing standards. The SEC takes this stuff quite seriously - as they should - so instances of companies violating listing standards are thankfully pretty rare. I expect the same thing here.
In terms of the requirements on trading that you mention, a requirement like that would violate current SEC rules about trading. But remember that companies are the metaphorical "central bank" of their own currency and can do all kinds of things that would reward those investors who truly are committed for the long-term. We don't have anything to announce in this area at this time, but I hope to be able to say more some day.
In terms of the requirements on trading that you mention, a requirement like that would violate current SEC rules about trading. But remember that companies are the metaphorical "central bank" of their own currency and can do all kinds of things that would reward those investors who truly are committed for the long-term. We don't have anything to announce in this area at this time, but I hope to be able to say more some day.
I do like that you explained why this is the case and didn't just provide a non-answer to it. Are you lobbying to get these sorts of rules changed?
(last time the question came up: https://news.ycombinator.com/item?id=19886420 )
(last time the question came up: https://news.ycombinator.com/item?id=19886420 )
It's not quite a simple as the word "lobbying" implies. But we are in active conversations with a lot of the other stakeholders on both the buy side and sell side to see if we can find ways to bring some flavor of this to the markets. But I really can't be more specific because we don't have anything concrete to report - yet.
I will say that I expect companies will also have opportunities to innovate in this area when it comes to their own stock, though I do think it will take a while as the industry is relatively conservative about things like this.
I will say that I expect companies will also have opportunities to innovate in this area when it comes to their own stock, though I do think it will take a while as the industry is relatively conservative about things like this.
Thank you for the very useful information! Is there a place to track innovations here?
not that I'm aware of, unfortunately
Something like improved dividends after some holding period?
I happen to like that idea but as far as I know no company has tried it (yet)
Still not clear though, why they need to dual list for this purpose. They can commit to the same actions without listing on exchange. I mean, you could have a service that monitors these commitments, but I am not clear as to why this service needs to be an exchange. It could be a product NYSE, NASDAQ just offer if there is demand. The fundamental purpose of an exchange is to facilitate trading.
That is only one of two fundamental purposes of exchanges, historically speaking. Listing standards are at least equally as important
agreed, but nothing stops any of the existing exchanges to have special listing classes, if there really is demand for that type of thing. Nothing stops any of the companies currently listed on any of the exchanges from committing to those same principles, etc. It just seems like a solution in search of a problem. Not that it can't make money for the investors, I am sure it can. But I don't see the point of this in terms of value proposition.
Do you have a simple guide for retail investers? For example will I be able to buy stocks via apps like Robinhood or Revolut?
I am intrigued by your offering, and for a retail trader holding LTSE stocks could be a better investment than aggressively day traded markets (especially if day trading were to be banned etc.), and might offer a strong alternative to regular retail stocks which are a bit too much of a rollercoaster ride, so I don't think I want to play that game much, but I also don't have a trading account at some huge institution.
Will you push to ensure retail investers are able casually join in?
I am intrigued by your offering, and for a retail trader holding LTSE stocks could be a better investment than aggressively day traded markets (especially if day trading were to be banned etc.), and might offer a strong alternative to regular retail stocks which are a bit too much of a rollercoaster ride, so I don't think I want to play that game much, but I also don't have a trading account at some huge institution.
Will you push to ensure retail investers are able casually join in?
We don't have such a guide yet, but it's a good idea. At the moment, all of our stocks are available through every legacy brokerage. Some brokers allow you to specify when you do a trade which venue the trade gets routed to, and you can specify LTSE today for that purpose.
I do expect over time listed companies will develop special rewards and benefits for long-term investors. Our rules are designed to make sure that any such programs are equally available to retail investors to casually join in, as you say
I do expect over time listed companies will develop special rewards and benefits for long-term investors. Our rules are designed to make sure that any such programs are equally available to retail investors to casually join in, as you say
What rule would such a requirement violate? Does the SEC have rules saying high-frequency/day trading must be allowed?
Founder/CEO of LTSE here. Happy to answer questions if anyone wants to know more, AMA
Last time I read up on LTSE I noticed that the exchange doesn’t operate differently than a traditional stock exchange. Instead the companies in LTSE adopt specific language in their bylaws that orients them toward the long-term. Is this a correct understanding?
If you aren’t implementing any exchange-level mechanisms, why does this need to be an exchange at all? Why not just create a template for corporate bylaws that you can certify, like a B-Corp? An LT-Corp, if you will.
If you aren’t implementing any exchange-level mechanisms, why does this need to be an exchange at all? Why not just create a template for corporate bylaws that you can certify, like a B-Corp? An LT-Corp, if you will.
We looked into this extensively before deciding to pursue an exchange, but found it just isn't workable. Investors simply don't believe a "certification" is especially binding, as companies can easily undo the certification at any time.
People today think of exchanges as just platforms to facilitate trading, but historically this is not how they used to be seen. Exchanges have always had a dual role, as avatars of corporate governance as well as sources of liquidity. We are trying to bring that balance back into the financial infrastructure of capital markets.
People today think of exchanges as just platforms to facilitate trading, but historically this is not how they used to be seen. Exchanges have always had a dual role, as avatars of corporate governance as well as sources of liquidity. We are trying to bring that balance back into the financial infrastructure of capital markets.
What you're describing sounds an awful lot like Gavin Belson's "Tethics" from Silicon Valley...
I love how this question, posted mere minutes after the offer to answer any questions, just sits here.
LTSE looked like BS before, now I'm convinced.
LTSE looked like BS before, now I'm convinced.
Yeah I came back today hoping this was going to be answered. I like the vision and concept of LTSE, but have yet to be convinced there are any substantial mechanisms in place that make this any different than the other exchanges.
It's probably strictly worse than other exchanges if we're considering what the point of an exchange actually is. I've tried optimistically viewing LTSE from multiple angles but an exchange just seems like the fundamentally incorrect business model for their supposed goals.
How would you make money of templates? With this model, you can profit on the value of every trade. I assume the exchange makes more when people invest more.
An exchange usually makes more when people trade more ("we're in the moving business, not the storage business") and stocks are more volatile, so from one angle it would seem like the very worst place possible to try to encourage long-termism.
LTSE has a different business model, so hopefully things will turn out differently
Why would I route orders through this exchange?
LTSE uses something called the Very Simple Market, which has some benefits over the legacy platforms. A brief summary is here:
https://ltse.com/blog/introducing-the-long-term-stock-exchan...
https://ltse.com/blog/introducing-the-long-term-stock-exchan...
You could pay for the template-producing company to monitor the template-using ones, like an auditing company or any sort of certificate-issuing one.
It seems the companies on LTSE are not bound to be traded only there so it doesn't seem like the trading would mostly go through it, since it's bound to have less liquidity than traditional exchanges.
It seems the companies on LTSE are not bound to be traded only there so it doesn't seem like the trading would mostly go through it, since it's bound to have less liquidity than traditional exchanges.
[deleted]
Previous AMA here: https://news.ycombinator.com/item?id=19881673
Quick skim and comparing with the OP article, the only concrete takeaway I get is shareholders that hold shares longer potentially have more voting power in your system? Good for founders, potentially (and ironically) bad for the company in the longterm.
I don't have to labor the point on this site that a few successful exits had founder CEO's that needed to be removed by investors/shareholders.
Quick skim and comparing with the OP article, the only concrete takeaway I get is shareholders that hold shares longer potentially have more voting power in your system? Good for founders, potentially (and ironically) bad for the company in the longterm.
I don't have to labor the point on this site that a few successful exits had founder CEO's that needed to be removed by investors/shareholders.
Thanks for linking to the previous AMA from when our rules were originally approved. There's actually also one from last year when we began trading stocks, but I don't quite know how to look up the URL right now - while also typing these answers.
Although an earlier version of our proposal did have a voting-rights mechanism, as part of a one-size-fits-all prescription, we ultimately decided against it. Personally, I was hoping to offer "long-term voting" as a principled compromise between standard governance and dual-class shares. But in the interim, dual-class shares have basically won in the market. I'm still hopeful as an industry we will be able to find better solutions in the future
Although an earlier version of our proposal did have a voting-rights mechanism, as part of a one-size-fits-all prescription, we ultimately decided against it. Personally, I was hoping to offer "long-term voting" as a principled compromise between standard governance and dual-class shares. But in the interim, dual-class shares have basically won in the market. I'm still hopeful as an industry we will be able to find better solutions in the future
Some, but there are also some very successful startups still run by their founders, like Tesla and (until recently) Amazon. Then there's Apple, which did much better after bringing the founder back.
(I've read that on average, companies run by founders tend to do better over the long term. I'm having trouble pulling up the source though; best I can find right now is the book 100 Baggers, quoting a study saying "there was often a large shareholder or an entrepreneurial founder involved.")
(I've read that on average, companies run by founders tend to do better over the long term. I'm having trouble pulling up the source though; best I can find right now is the book 100 Baggers, quoting a study saying "there was often a large shareholder or an entrepreneurial founder involved.")
Is there anything a shareholder can do to encourage the LTSE?
Or said another way, is there a mechanism for a shareholder to specify which exchange they are buying stock on? And would traffic on the LTSE help the LTSE?
Or is most of the support for the LTSE accomplished on the company side, and at listing time?
Or is most of the support for the LTSE accomplished on the company side, and at listing time?
This is a great question. Let me take it in parts.
First off, you're right that the most important place for support is via companies. Ultimately, that's what matters. But you'd be surprised how much voice people have in influencing companies. For example, if you're an employee, I can tell you first hand how closely CEO's and executive teams monitor (for example) what gets asked about at all-hands meetings.
Shareholders matter too. Companies want to know what their investors think and many of them have whole "investor relations" departments whose job is, in part, to relay investor sentiment to the rest of the company.
In terms of trading, yes, you can specify what exchange your shares trade on. Almost every major broker is a member of LTSE and can route orders to the exchange. As the customer, you're in charge of where your orders get routed, and you're welcome to specify a specific venue. Not every broker supports this right in their web UI, although I've heard that Interactive Brokers (IBKR) does.
If you've been following the news about controversies such as "pay for order flow" and such, you might make a connection here. Most retail customers don't specify where their order should be routed and as a result, they lend their voice to many of these industry practices. Because LTSE is not focused on maximizing trading volume, things are a little different on our platform. If you route to LTSE, you can be sure that no intermediary is getting paid for your transaction, and LTSE does not take a trading fee either.
As to whether traffic on LTSE helps, I think it does lend a little bit of credibility. If you take the time to tell your broker this is what you want, they will probably notice.
Thanks for the thoughtful question!
First off, you're right that the most important place for support is via companies. Ultimately, that's what matters. But you'd be surprised how much voice people have in influencing companies. For example, if you're an employee, I can tell you first hand how closely CEO's and executive teams monitor (for example) what gets asked about at all-hands meetings.
Shareholders matter too. Companies want to know what their investors think and many of them have whole "investor relations" departments whose job is, in part, to relay investor sentiment to the rest of the company.
In terms of trading, yes, you can specify what exchange your shares trade on. Almost every major broker is a member of LTSE and can route orders to the exchange. As the customer, you're in charge of where your orders get routed, and you're welcome to specify a specific venue. Not every broker supports this right in their web UI, although I've heard that Interactive Brokers (IBKR) does.
If you've been following the news about controversies such as "pay for order flow" and such, you might make a connection here. Most retail customers don't specify where their order should be routed and as a result, they lend their voice to many of these industry practices. Because LTSE is not focused on maximizing trading volume, things are a little different on our platform. If you route to LTSE, you can be sure that no intermediary is getting paid for your transaction, and LTSE does not take a trading fee either.
As to whether traffic on LTSE helps, I think it does lend a little bit of credibility. If you take the time to tell your broker this is what you want, they will probably notice.
Thanks for the thoughtful question!
If I specify a particular venue, does Reg NMS still require my order to only be filled if it's within the national best bid-offer (NBBO) range? If not, that would seem to be a big caveat that should be mentioned whenever mentioning that retail inventors can specify a specific venue.
(Disclosure: I work on the sell-side, but don't have a Series 7. Certainly, for vanilla orders, Reg NMS requires your broker to route your order for best price. If you're specifying the routing, though, I'll leave it to someone with a Series 7 to explain which Reg NMS protections still apply.)
(Disclosure: I work on the sell-side, but don't have a Series 7. Certainly, for vanilla orders, Reg NMS requires your broker to route your order for best price. If you're specifying the routing, though, I'll leave it to someone with a Series 7 to explain which Reg NMS protections still apply.)
The short answer is "yes" but there's a lot of nuance to it. Reg NMS does not require routing of anything - a very common misunderstanding. Reg NMS does not get you the "best price", it prevents the execution of trades at prices inferior to protected quotations displayed by other exchanges.
youre able to route orders to specific market trading venues. If you open up IBKR and look at the subwindow (forgot the name sorry) that shows realtime orders, you'll see stuff like ARCA and BATS and these are different venues basically. Similarly if you do a simple 10,000 share order for TWLO at 7.50 limit, the advanced order entry system will let you click (probably with a dropdown or something) which venue to route your order to.
Personally I'm not really sold on the idea of LTSE. I mean it sounds good I guess, but governance of a public company doesn't start with the venues it is able to be traded on. It starts with the company, or at least with our regulatory bodies (lol imagine that)
Personally I'm not really sold on the idea of LTSE. I mean it sounds good I guess, but governance of a public company doesn't start with the venues it is able to be traded on. It starts with the company, or at least with our regulatory bodies (lol imagine that)
I actually agree with you. Exchanges are regulatory bodies (so-called SROs) in our capital markets system. We think there should be a new one with different incentives to do a good job for companies
The obvious way of ensuring long-term performance is to slow down the buy/sell process. For example, the company could offer a discount on its stock for anyone who agrees to hold it for six months. This seems like a more practical solution than a whole bunch of policy nods which, as far as I can tell, can't actually prevent someone from day trading the stock based on short-term performance. Am I totally off base?
Nope, that's a very good idea. I personally don't think long-term investors should have to pay the same price to buy stock as speculators. But in finance this is still considered a very radical notion, so I think it will be some time before we see this idea adopted
Has the LTSE considered paying dividends based on holding time?
Can you backdate dividends? Each quarter, pick a random date 1-2 months back as the date of record.
Both NYSE and Nasdaq rules require the record date to be announced at least 10 days in advance, so a mainstream U.S.-listed company can't backdate it. Whether it'd pass SEC muster if we take exchange rules out of the picture, I don't know.
Yes, I think that’s something companies may consider eventually.
These all seem like complicated ways of avoiding charging more for trading.
Make trading expensive and it will become less voluminous and short term. Allow companies to exclusively list where trading is purposely expensive.
Make trading expensive and it will become less voluminous and short term. Allow companies to exclusively list where trading is purposely expensive.
Is there research showing that public companies focusing on long term performance perform better than companies focusing on short term performance?
It is often taken as a given that this is true, despite the many very long term successful public companies.
It is often taken as a given that this is true, despite the many very long term successful public companies.
Yes there is much research in this area. Personally, I first got interested in this as a philosophical matter from reading about Toyota and its history (which has been extensively researched)
I think it's interesting that you use the word "despite" here, since of course it's those very companies that provide the data for this area of research.
I don't have time to pull links to papers right now, but there are some referenced in our (rather old now) whitepaper:
https://longtermstockexchange.com/static/principals_for_lt_s...
as well as our original application to the SEC: https://www.sec.gov/rules/sro/ltse/2019/34-86327.pdf
Some of my favorite research shows what happens to pairwise-matched companies where one went public and one stayed private. The effects are totally predictable.
I think it's interesting that you use the word "despite" here, since of course it's those very companies that provide the data for this area of research.
I don't have time to pull links to papers right now, but there are some referenced in our (rather old now) whitepaper:
https://longtermstockexchange.com/static/principals_for_lt_s...
as well as our original application to the SEC: https://www.sec.gov/rules/sro/ltse/2019/34-86327.pdf
Some of my favorite research shows what happens to pairwise-matched companies where one went public and one stayed private. The effects are totally predictable.
> Some of my favorite research shows what happens to pairwise-matched companies where one went public and one stayed private. The effects are totally predictable.
That sounds like an interesting read. How can I find it?
That sounds like an interesting read. How can I find it?
I don't have the citation handy, but I'll keep an eye out next time I go through my archives and see if I can dig up a link. It's a fascinating branch of research, imho
What specific benefit does listing on the LTSE bring for companies? Can't they just operate with a view for the long term and trade on a different exchange? (I'm thinking about Amazon/Berkshire Hathaway here)
Rephrased: What specific benefit does printing "gluten free" on a can of tuna bring?
Plus network effect in the case of LTSE. Which is positive.
What should consumer investors expect to be different when interacting with LTSE listed stocks? I am not asking about the LTSE restrictions on the companies, rather about how trading / etc works with these stocks?
As of today, investing in LTSE listed stocks is 100% backwards compatible with every existing stock trading platform and broker. You literally will not notice any difference.
Hi Eric - don’t know what AMA means (sorry), but I would like to talk about this with you / your team. I also sent you a note via your website and Twitter. Bottom line is that coverage of your recent announcement talks about dual listing. I’m wondering if you’d be equipped to do a primary. Thanks!
Jonathon Feit [email protected]
Jonathon Feit [email protected]
AMA: Ask Me Anything
Do you see benefit corporations as being a natural fit for LTSE? If so, would LTSE ever require companies be organized as b-corps as a condition of listing on LTSE?
Yes, I think it's a very natural fit. The first wave of B-corps that went public had a very bad experience, and I think the problem was that they did not have the right financial infrastructure around them to support their vision. We hope to remedy that.
So far, we have taken the view that each company has to design its long-term program around its own philosophy and approach. I don't know if it would really work to adopt a one-size-fits-all rule like this, even if I personally liked it.
We will have to see how the concept of benefit corporations evolves. So far, it seems that a number of companies that truly exist for the benefit of humanity have chosen not to organize themselves under that framework. As long as this is true, I'd be wary of excluding them from LTSE.
So far, we have taken the view that each company has to design its long-term program around its own philosophy and approach. I don't know if it would really work to adopt a one-size-fits-all rule like this, even if I personally liked it.
We will have to see how the concept of benefit corporations evolves. So far, it seems that a number of companies that truly exist for the benefit of humanity have chosen not to organize themselves under that framework. As long as this is true, I'd be wary of excluding them from LTSE.
How correlated can we expect the LTSE performance and the stock performance on other exchanges to be?
The research is pretty clear that companies run in a long-term way are more profitable, resilient and lead to better returns for investors. I can't speak to which stocks will do better than others, but we built the listing standards to match the actions seen to drive long-term performance.
This is an awesome idea!
I'm curious as to specific differences wrt to other exchanges, your website doesn't really do a direct comparison. For example, do you require holders to hold a certain amount of time before being able to sell, are there limits around frequency of trading, how do you make money, etc.
Or is it more around including companies that think long term? In which case, I think that's also doable on normal exchanges (for example, Amazon is famous for long term thinking and has done well on normal exchanges too).
I'm curious as to specific differences wrt to other exchanges, your website doesn't really do a direct comparison. For example, do you require holders to hold a certain amount of time before being able to sell, are there limits around frequency of trading, how do you make money, etc.
Or is it more around including companies that think long term? In which case, I think that's also doable on normal exchanges (for example, Amazon is famous for long term thinking and has done well on normal exchanges too).
Thanks!
The SEC's rules around trading (today) really prohibit a lot of the "obvious" ideas people have had about how to slow down trading. We have some stuff in the works here, but it won't be public for a while.
That said, we have adopted a construct that we call the "Very Simple Market" that eliminates a number of trading "features" such as hidden liquidity. We think this makes it a more conducive environment for the longest-term investors to trade. We also have a business model that is much more aligned with the long-term investors and companies than most incumbents. We don't seek to maximize our trading volume, so that requires us to make money by helping our customers run their businesses better.
As we say in SV, if you're not the customer, you're the product. This applies to issuers as well.
On your latter point, you've got it right. We don't think we have an exclusive on good ideas, and there's definitely examples where talented founders have found ways to build for the long-term in spite of the existing market structures.
But when was the last time you heard a CEO say that they were able to think long-term _because_ of the markets in stead of in spite? That to me is a key difference
The SEC's rules around trading (today) really prohibit a lot of the "obvious" ideas people have had about how to slow down trading. We have some stuff in the works here, but it won't be public for a while.
That said, we have adopted a construct that we call the "Very Simple Market" that eliminates a number of trading "features" such as hidden liquidity. We think this makes it a more conducive environment for the longest-term investors to trade. We also have a business model that is much more aligned with the long-term investors and companies than most incumbents. We don't seek to maximize our trading volume, so that requires us to make money by helping our customers run their businesses better.
As we say in SV, if you're not the customer, you're the product. This applies to issuers as well.
On your latter point, you've got it right. We don't think we have an exclusive on good ideas, and there's definitely examples where talented founders have found ways to build for the long-term in spite of the existing market structures.
But when was the last time you heard a CEO say that they were able to think long-term _because_ of the markets in stead of in spite? That to me is a key difference
To which extend do you think market fragmentation (as a result of reg NMS) is part of the problem?
If i understand your reference to "hidden liquidity" correctly, you have simple order types and when compared to other venues.
Wouldn't it be better for price discovery, if all US equities were traded in one continuous limit order book instead of across a dozen venues, each with its own funky order types and quirks?
if you agree, i cannot help but think about this xkcd https://xkcd.com/927/
If i understand your reference to "hidden liquidity" correctly, you have simple order types and when compared to other venues.
Wouldn't it be better for price discovery, if all US equities were traded in one continuous limit order book instead of across a dozen venues, each with its own funky order types and quirks?
if you agree, i cannot help but think about this xkcd https://xkcd.com/927/
XKCD as usual quite prescient about the problems of standardization. I think pretty much everyone agrees with your solution -- so long as their platform is the one that everyone standardizes on!
The sad reality is that because of these issues (and, to be fair, others) most trading is moving off lit exchanges altogether. For some companies we are talking about 80% or more of the volume, and this would be even higher if not for the requirement that day-open and close auctions happen on the "home" exchange.
We have made a proposal to the SEC to bring this off-exchange activity back into the light of the protected quote, but nothing to report at this time about how, when, or if this will come to fruition: https://longtermstockexchange.com/resources/docs/LTSE_Exempt...
The sad reality is that because of these issues (and, to be fair, others) most trading is moving off lit exchanges altogether. For some companies we are talking about 80% or more of the volume, and this would be even higher if not for the requirement that day-open and close auctions happen on the "home" exchange.
We have made a proposal to the SEC to bring this off-exchange activity back into the light of the protected quote, but nothing to report at this time about how, when, or if this will come to fruition: https://longtermstockexchange.com/resources/docs/LTSE_Exempt...
What specific policies (not principles) will most people find to be the biggest difference between LTSE and NYSE? For example, if someone purchases shares through LTSE is there a minimum number of days that must elapse before the shares can be sold? Is there a policy regarding exactly how executive compensation should align with long-term success, or is the policy just that the company needs to publish such a document? Etc.
LTSE work through what are called "principles-based listing standards" which require every listed company to adopt (and publish) a concrete policy that shows how they are committing to each specific principle. LTSE has a regulatory team that acts as a certifying agency. So while we don't have a one-size-fits-all policy that every company must enact on, for example, executive comp, they do have to make real, concrete commitments in that area in order to be listed.
In terms of trading, we don't currently have any rules of the sort you mention. Under today's regulatory framework, this would be hard (but not impossible) to do. We hope to see more work in this area, but nothing to announce at this time.
In terms of trading, we don't currently have any rules of the sort you mention. Under today's regulatory framework, this would be hard (but not impossible) to do. We hope to see more work in this area, but nothing to announce at this time.
I have seen that some exchanges like NASDAQ are considering adding social justice elements into their requirements for listed companies. For instance, NASDAQ had submitted a proposal to force diversity of boards on companies (https://www.nasdaq.com/press-release/nasdaq-to-advance-diver...). Personally I do not like the mission creep and politicization of institutions in general, and am wondering where/how you draw the line on what you will require of companies.
Your listing principles page (https://longtermstockexchange.com/listings/principles/) is interesting in that there's a lot I agree with (like compensation policy) but then some other principles (like "The company’s approach to diversity and inclusion" or "The company’s impact on the environment and its community") are vague enough that I am not sure what it implies. Is it fair to consider LTSE a "progressive" financial institution?
Your listing principles page (https://longtermstockexchange.com/listings/principles/) is interesting in that there's a lot I agree with (like compensation policy) but then some other principles (like "The company’s approach to diversity and inclusion" or "The company’s impact on the environment and its community") are vague enough that I am not sure what it implies. Is it fair to consider LTSE a "progressive" financial institution?
Our reforms are fundamentally market-based. We work with companies to develop policies that commit them to the values that they think ensure their ability to pursue their mission long-term. It's not one-size-fits-all and ultimately investors will judge the results. I think you'll see a diversity of companies and views on the exchange, just as you see a diversity of views among our own investors and employees.
Does the similar name to https://en.m.wikipedia.org/wiki/Long-Term_Capital_Management indicate investors have short-term memory?
What’s the deal with captable.io transitioning from “a public service for every startup to safeguard their equity from day one” to basically the same price model as carta?
Why weren’t legacy companies given grandfathered pricing?
Why weren’t legacy companies given grandfathered pricing?
I know you're probably here to more specifically talk about this news but I'm curious broadly what you've learned that's surprised you about running a stock exchange that outsiders may not know.
No question but I love the idea. I was just explaining to my wife about how I never want to work at a publicly traded company because their only goal is maximizing shareholder value in the short term.
> their only goal is maximizing shareholder value in the short term.
What about Amazon that operated on losses for many consecutive years?
What about Amazon that operated on losses for many consecutive years?
Profit is not directly linked to shareholder value. E.g. an expanding business that is operating at a loss could end up benefiting the shareholders (through valuation) if there is an expectation of future profitability.
The grandparent quoted the line
>> their only goal is maximizing shareholder value in the short term
and mentioned Amazon making a loss. You're right that Amazon could credibly be described as "maximizing shareholder value", but I think the question of whether they maximize shareholder value in the short term is more subtle.
You could do some jiujitsu and say "long-term value maximization is equivalent to short-term value maximization under reasonable assumptions", but I think the discussion upthread was about a more prosaic concept of short-termism that is related to profits. They wouldn't have qualified their statement with "in the short term" if they'd meant "expected NPV" :-).
>> their only goal is maximizing shareholder value in the short term
and mentioned Amazon making a loss. You're right that Amazon could credibly be described as "maximizing shareholder value", but I think the question of whether they maximize shareholder value in the short term is more subtle.
You could do some jiujitsu and say "long-term value maximization is equivalent to short-term value maximization under reasonable assumptions", but I think the discussion upthread was about a more prosaic concept of short-termism that is related to profits. They wouldn't have qualified their statement with "in the short term" if they'd meant "expected NPV" :-).
But here is the catch: for long term expected profits to affect short term value, the market has to be convinced of it.
Actual long term performance requires more than PR, pitching, and posturing. It requires actually following through and reaching the expected profits.
Actual long term performance requires more than PR, pitching, and posturing. It requires actually following through and reaching the expected profits.
Thank you!
This is exciting. Who's next to list on LTSE???
Stay tuned...
This page (https://ltse.com/platform/equity/) says "Trusted by 32,000 companies". What does that mean?
We have a governance platform for private companies, used by a lot of YC and other startups
Reddit?
Can international retail investors buy stocks from/on LTSE? If not, do you plan to allow that anytime soon? Thanks!
Yes.
Is it possible to invest in the LTSE itself?
We are currently a private tech company, so only accredited investors have been able to invest so far. We hope to list publicly one day.
Would you list on your own exchange? Is that legal?
Yes, of course. It’s turtles all the way down - that’s how the incumbent exchanges do it too :)
Didn't the SEC just change that?
Not that I’m aware of!
The change the parent is probably thinking of is that you could offer up to $5 million as a Reg Crowdfunding round (vs the previous cap of $1 million) if you wanted to offer non-accredited investors a way to invest while you are still a private company.
Wefunder or Republic or another such service would create a special purpose LLC to be the shareholder of record (or SAFE/noteholder or whatever) on your cap table.
Wefunder or Republic or another such service would create a special purpose LLC to be the shareholder of record (or SAFE/noteholder or whatever) on your cap table.
That's not exactly how it works, but close in spirit. When you invest in Republic, you are entering into a contract called a CrowdSAFE. It's a convertible instrument much like a SAFE, but instead of converting into the next priced funding round into stock, it converts in a liquidity event directly into stock (or the cash equivalent if an acquisition for cash). There is no intermediary SPV.
What you're describing however is the way AngelList works.
The reason for this is mainly because the Reg CF terms prohibit crowdfunding investment vehicles (such as funds or SPVs).
(Source: I am former CSO of Republic)
What you're describing however is the way AngelList works.
The reason for this is mainly because the Reg CF terms prohibit crowdfunding investment vehicles (such as funds or SPVs).
(Source: I am former CSO of Republic)
Interesting. I've purchased a CrowdSAFE with Republic and I think that aligns with what I remember about the CrowdSAFE.
Recently though I bought shares in a private company through wefunder and the docs specify I'll be a unitholder in an SPV LLC set up by wefunder that will own the stock, so I wonder if this prohibition changed with the $5m cap change?
Recently though I bought shares in a private company through wefunder and the docs specify I'll be a unitholder in an SPV LLC set up by wefunder that will own the stock, so I wonder if this prohibition changed with the $5m cap change?
Dug it up. SEC updates => https://www.sec.gov/news/press-release/2020-191
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The main problem with the normal stock exchanges in my opinion is the lack of meaningful long term shorts. Betting up and down are highly asymmetric in cost. Meaningful long term shorts are needed to prevent bubbles.
Is there such mechanism in the LTSE?
> The CEOs of both companies, which also are listed on the New York Stock Exchange, were early investors in LTSE with financial stakes of less than 1.5%.
So the CEOs of Twilio and Asana invested in this exchange then convinced their board to list on it. I'm sure they're not just interested for personal gain though.
So the CEOs of Twilio and Asana invested in this exchange then convinced their board to list on it. I'm sure they're not just interested for personal gain though.
> To list on LTSE in August, Twilio and Asana are agreeing to a slate of commitments such as aligning executive and board compensation with long-term performance; taking customers and employees into account; and explaining how the company’s board oversees its long-term strategy. These commitments must be concrete policies that can be monitored by LTSE.
Sounds like a good thing.
Sounds like a good thing.
It’s hard to make the claim that public markets overly prioritise the short term with the last weeks’ string of EV start-ups IPOs / SPAC mergers and ExxonMobile Board manoeuvre.
At the same time, founder supervoting is falling out of favor. This neatly backdoors to the same result—founders (and institutional investors, who can invest through a long-holding front end and then allocate exposure to that on the back end) gaining outsized influence over individual investors (who aren’t coördinated) and hedge funds. Seems like a lot of collateral damage.
At the same time, founder supervoting is falling out of favor. This neatly backdoors to the same result—founders (and institutional investors, who can invest through a long-holding front end and then allocate exposure to that on the back end) gaining outsized influence over individual investors (who aren’t coördinated) and hedge funds. Seems like a lot of collateral damage.
Would you consider founders and institutional investors having influence that hedge funds will not have to be a good, bad, or neutral arrangement?
LTSE is a sorely needed financial innovation but all the stuff around social impact is a new burden I think... Not everyone's going to be interested in that, oh well.
It's definitely not for everybody!
Is it why Asana CEO buys 160000 shares every day, pumping up price?
Is there any citation for this? Asana’s stock has been absolutely bananas recently.
Scroll to "Insider trading" section at the bottom https://finviz.com/quote.ashx?t=asan
Oh man. Wish I had known this earlier. Maybe I would’ve jumped on the bandwagon. Moskovitz has to be worth between $10-30B with Facebook nearing a trillion market cap. $7.5-$10M daily stock purchases is nothing for him. He could do it for 60 total days without affecting him financially at all.
I have to check the comps, but Monday.com was valued more than Asana just like two weeks ago and far more before the pumping began. How much better could Monday.com’s financials be
I have to check the comps, but Monday.com was valued more than Asana just like two weeks ago and far more before the pumping began. How much better could Monday.com’s financials be
Never used finviz before, but I found a simpler link: https://finviz.com/insidertrading.ashx?oc=1549917&tc=1&b=2
I find the name Asana for a company, to be offensive as cultural appropriation. Secondly, I am absolutely opposed to the Surveillance Capitalism model, which these people have driven relentlessly. This combination feels dystopian.
ELI5
Can someone provide the simple overview of (a) how LTSE is different, (b) what the listed company pro/cons are and (c) what are the investor pro/cons
Can someone provide the simple overview of (a) how LTSE is different, (b) what the listed company pro/cons are and (c) what are the investor pro/cons
What types of companies are able to list on LTSE?
The article says the following:
> To list on LTSE in August, Twilio and Asana are agreeing to a slate of commitments such as aligning executive and board compensation with long-term performance; taking customers and employees into account; and explaining how the company’s board oversees its long-term strategy. These commitments must be concrete policies that can be monitored by LTSE.
> To list on LTSE in August, Twilio and Asana are agreeing to a slate of commitments such as aligning executive and board compensation with long-term performance; taking customers and employees into account; and explaining how the company’s board oversees its long-term strategy. These commitments must be concrete policies that can be monitored by LTSE.
Never heard of a long term stack exchange. Is this a US thing against HFTs?
i remember reading about asana on here years ago. wasn't it supposed to be the thing that saved us from JIRA but ended up turning into the very thing everyone hated about JIRA?
Twilio’s great but what does everyone think of their long term prospects? Pretty much every automatically sent text message / WhatsApp is probably sent from Twillo already. What is next for them?
Sending SMSes is their core offering, for sure, but I think that's selling them short. They also offer programmable text+voice, chat rooms, video chat etc. Lots of useful stuff for building/bootstrapping your own platforms. Their other product (through acquisition) is SendGrid, for transactional emails.
I imagine what's next is more of the same: solutions to do with different ways of communicating. Perhaps no-code/low-code variants to many of their offerings, much like what Stripe is doing (powerful technical layer, but also very business friendly introductory solutions)
I imagine what's next is more of the same: solutions to do with different ways of communicating. Perhaps no-code/low-code variants to many of their offerings, much like what Stripe is doing (powerful technical layer, but also very business friendly introductory solutions)
Asana is the shocker for me. I've seen many, many enterprises big and small and barely a handful were running Asana. And none of them liked it.
I love it. We’ve used it for years.
Asana has been an incredible upgrade from JIRA. We switched two weeks ago and it's the best project management solution I've used by miles, nothing even begins to compare.
Their peak stock price was like 20% higher than right now. With a lot of similar cloud companies hitting all time highs, Twilio’s market cap would exceed $75B if they hit all time high again. Acquisitions can do quite a bit. That’s how Salesforce runs :). Twilio bought Segment for $3.2 in stock.
They seem to be expanding successfully into video and email. I'd expect the next big lift to be the sequencing of those different mediums.
Wonder who the first exclusive listing is.
We intentionally do not offer exclusive listings at this time
bedhead(1)