[evrydayhustling]

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?

[Animats]

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...

[ianai]

Fta:”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.

It would also require more disclosure to investors about meeting key milestones and plans, and reward long-term shareholders by giving them more voting power the longer they hold the stock.”

[EnderViaAnsible]

I don't blame our OP for wanting more information. Certainly anything trumpeting the zeitgeist or offering a suspiciously tuned Worry De Jour should be evaluated carefully. (That is, it's obvious that "we want to fix short term ism in the stock market" will be a popular and marketable idea, whether that is the intention/actual end result or not.)

Even in the parts you've quoted, the language seems very careful.

They'll "ask" businesses not to give huge executive bonuses, but asking is free and non-binding. A large portion of the American public has been "asking" for this for a long time. Is the problem really that no one has asked?

They'll require "more information" about key milestones and plans for investors, which sure, that's nice for investors, or will be if it's more information than is usually given by CEOs to a board, which I doubt. (Investors already demand to know what the plan is, and even startups usually have plans for several years out even if they're goals more than plans.)

But is that actually the problem that causes short term ism? Are we insinuating that investors love long term investments and the only reason they don't make them is because CEOs don't tell them enough?

Etc. Now, maybe these worries are invalid, and the actual charter does actually prescribe effective regulations to solicit the desired behavior.

But to confirm that, we will need more information than the vague assertions provided in the article. Which is why our OP was trying to investigate the source documents.

(Also, doesn't it seem odd that a medium length article about an exchange's sole reason for existence contains almost no information about how that exchange intends to achieve the reasons for which if exists? Just assertions that it will do so with all language carefully qualified?)

[EnderViaAnsible]

I think I'd add that my concerns aren't just, or even primarily, that they are trying to do something nefarious.

Rather, I tend to view issues as having a certain amount of public mindshare, and the success or failure of initial attempts at a solution tend to have an outsized influence on public willingness to assign resources to a problem.

So I think that if this is a poorly implemented solution, and fails, we may not try again for some time, even if the actual idea is perfectly workable. Since I also agree that this short term...uh...ism...is a genuine problem, I would very much like to see a successful solution to the trouble.

And I do mean the traditional public: this problem of poor implementation scuttling perfectly good ideas also afflicts the efforts of for profit corporations as much as it does democratically controlled public servants or charitably beholden non-profits.

[evrydayhustling]

Thanks and wow... It's a lot. Looks like they have a set of commitments about owners declaring change of control, and some investigative powers to figure out if someone is circumventing rules. It's a really interesting idea but feels like it will need a decade of experiments to see what works.

[rahimnathwani]

"but feels like it will need a decade of experiments to see what works"

Well, Eric literally wrote the book on that approach, so I guess that's not a problem. Sure, $19MM seems like a lot to raise before your MVP.

[acct1771]

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.