US Approves NYSE Listing Plan To Cut Out Wall Street Middlemen (reuters.com) 51
Companies may go public on the New York Stock Exchange without forking out fat fees to Wall Street banks which typically underwrite such capital raisings, the U.S. securities regulator said on Tuesday. Reuters reports: The Securities and Exchange Commission approval of the NYSE's "direct" listing plan threatens to overhaul the U.S. initial public offering market, by allowing aspiring public companies to sell shares directly to investors. Investment banks have for decades organized IPOs, marketed them to institutions, and supported the stock via their trading desks. The change, following months of industry haggling, will help reduce what critics call excessive underwriter fees, a major barrier to companies looking to go public. Investor groups, however, warned it could diminish their protections as the banks perform due diligence on the companies.
Oh no. (Score:2)
Whatever will business do without banks protecting them.
Re:Oh no. (Score:4, Insightful)
Investment banks are leeches. They suck up about 7.5% of GDP while adding nothing of value.
Instead of using underwriters, IPOs should be done via a public auction directly to investors.
This is a welcome reform. It is nice to see that the swamp is finally being drained.
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Just in time for the Airbnb IPO, IIRC.
Re: Oh no. (Score:3)
Although I welcome the change itself, I consider the loss of a player an increase in risk to the investor. I don't think mutual funds "managing" retirement vehicles should be allowed in the initial bidding. They are supposed to target safer options.
So I am for the deregulation due to it now being a choice for the company and those willing to bet their own finances on it; have at it.
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Re: Oh no. (Score:2)
Instead of using underwriters, IPOs should be done via a public auction directly to investors.
This is a welcome reform. It is nice to see that the swamp is finally being drained.
I like this plan, genius!
By inviting everyone and their mother to come stand directly in the swamp, the swamp goes away, because that's how displacement works.
#WCGR
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Due Diligence Process Unchanged (Score:2)
According to Davis Polk [davispolk.com], via Matt Levine [bloomberg.com]:
We note that while there would be no underwritten IPO or underwriters, existing SEC rules do require that investment banks participate as financial advisors and accept underwriter liability, so that the basic registration and due diligence process will remain largely as it is for underwritten offerings.
As an example, both Slack and Spotify recently performed direct listings, but still worked with investment banks for much of the process, and those IPOs went pretty smoothly. With the old rules, only existing private equity holders (e.g. investors and employees) could sell shares during those direct listing IPOs, but the company was not allowed to issue shares to raise capital during the IPO. This rule change lifts that restriction.
Re: Oh no. (Score:2)
Re: Oh no. (Score:1)
Banks, backed by government funds, are the reason we have massive boom/bust cycles. Forget not stabilising things, they are actively causing swings with their stupid speculative interventions.
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There were "panics" long before we had central banks. The expansionary monetary policies of the American banking system during downturns makes financial cycles less severe.
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Watch and learn. [youtube.com]
known kook and possible white supremacist, at minimum has no problem consorting with them to further his own agenda
which just as an aside, anarcho-capitalism and communism are essentially the same end goal and both are flawed in that they fail to take into account that power abhors a vacuum, get rid of one state and a new one will arise to take its place
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(disclosure, copied from the wiki entry on the 1920 recession which summarizes a paper written in response to Woods' theory)
- the most substantial downsizing of government was attributable to the Wilson administration, and occurred well before the onset of the 1920–1921 recession.
- the Harding administration raised revenues in 1921 by expanding the tax base considerably at the same time that it lowered rates.
- Woods underemphasizes the role the monetary stimulus played in reviving the depressed econom
Re: Oh no. (Score:2, Informative)
Except inflation is a sign of a growing economy. If you aren't growing then you are going backwards.
When you get runaway inflation you have issues. And when you get a decade of no inflation you have issues.
The bigger issue is the usa let's congress set the tax rate and budget and then let's an independent panel set the interest rate. This helps keep things separate but when congress cuts taxes it stimulates the economy. Except if the economy doesn't need a stimulant to counter rising inflation then you c
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No, inflation is a sign that the money-supply is growing faster than the economy.
Mind you, it's pretty much impossible to keep the money supply exactly in sync with production. So there is always going to be either inflation or deflation happening. And since deflation causes more problems than inflation, it's better to aim for a slight inflation.
Note that increasing the money supply by 25-30% in a year is a bad thing, even when it's absolutely necessary (Y
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[Citation needed]
This seems to argue it does not stimulate the economy to cut taxes.
This feels true, but I don't have a source.
What were the other two? Are you saying the 1929 was the fault of the Republicans? How
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That's not the monetary policy during a downturn. That's the failure to return to growth policy when the economy recovers.
You're both right.
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There were "panics" long before we had central banks. The expansionary monetary policies of the American banking system during downturns makes financial cycles less severe.
a) What happens when it's the banks themselves that cause those "downturns"? (eg. The recent-enough-to-remember housing crisis)
b) What happens if those "expansionary monetary policies" allow bankers to get very rich during the downturns, instead of sending them to prison where they belong?
Re: Oh no. (Score:2)
Then you still don't get massive bank runs.
The only way to truly insure traditional deposits is with the printing press. The only alternative I see is full reserve banking and forbidding guaranteed pay out funds which would just create alternative checking accounts vulnerable to runs ... people are suckers for interest and promises of zero risk, you can not let the free market fill that demand. Without a government printing press backstop everything needs to be marked to market or cold hard cash.
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As I understand it, the FDIC charges a small fee (to the bank) and has limited coverage. Couple that with mandated minimums on reserves and rules on how money can be invested and there should always be sufficient assets to cover deposits without printing money.
Re: Oh no. (Score:2)
100k per account would bankrupt any normal insurance in a big downturn, full faith and credit is what makes it trustworthy.
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The banks didn't cause a downturn. Idiots investing in the mortgages like the stock market did.
Swamp draining (Score:4, Insightful)
So... the swamp draining starts when there's only a few of days of presidency left.
I wonder who pissed him off?
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So... the swamp draining starts when there's only a few of days of presidency left.
I wonder who pissed him off?
Draining? Please.
The new Swamp Manager is already carrying around a fistful of Plugs, sponsored by the TDS Alliance of Liberated Corporations pushing their Business As Usual campaign.
Pay no attention to the briefcase full of...uhh...tchotchkes. Yeah, that's it.
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Perhaps this is just so that one of his upcoming news media business ventures can go public without the usual bank-related scrutiny. Who pissed him off? Those who believe in the rule of law.
This is just dueling billionaires (Score:2)
Comment removed (Score:4, Insightful)
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Re: Do your own due diligence, ALWAYS. (Score:2)
If you're depending on an IPO's underwriter to do your homework, you shouldn't be buying IPO shares at all.
Ok, caveat emptor and all that jazz, but the stock market sliding towards Kickstarter is good how?
Someone seriously looked around and said, "You know what's wrong with the economy today, Jim? Startups need an easier time raising funds, from soccer moms on Robinhood!" During a bubble, naturally, because there's no better time to play shell games with risk when everything always goes up, and nothing bad can happen.
This isn't draining the swamp, this is tickets to the swamp, because we knocked down a box sec
Don't delegate Due Diligence (Score:1)
Whenever I didn't do my own DD, the outcome was less than optimal.
Yes, the workload can be high, but you can form investor clubs or invest alongside friends that you really trust.
You should be at arm's length, and that is seldom possible with a bank.
Know Your Limits (Score:5, Interesting)
Performing due diligence on an existing, established and publicly-listed company [before making an investment] typically requires a sophisticated investor. You need to be able to read and understand a 10-Q [just for starters] and should have a good idea of the company's marketplace, management, strategy, debts, etc.
Performing due diligence at IPO, i.e. at a point in the history of a company when it has no established track record, multiplies the risks by as much as one or more orders of magnitude. Whilst it might be reassuring for someone to make investment decisions "alongside friends that you really trust", if you are, by definition, inexperienced, then how are you going to be able to objectively evaluate the experience of your "friends" and know that they are qualified to give you good advice?
Investor clubs might be an interesting way to learn more about the information resources needed for investing, but here, again, care is needed. If you buy financial advice from someone who is an RIA (Registered Investment Advisor), CFP (Certified Financial Planner), CFA (Certified Financial Analyst), CIC (Chartered Investment Counsellor), ChFC (Chartered Financial Counsellor), and/or PFS (Personal Financial Specialist), then from the outset you should be able to make a reasonable determination as to the acumen of the advisor. If you form or join an investor club, there is always the chance that someone may be offering inadequate or unethical advice - and you'd never know.
KT19284 is entirely correct in saying that due diligence is essential before making an investment... but that needs to extend to being diligent about the person/people from whom you take your investment advice.
As the old saying goes, "A fool and his money are soon parted..."
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Even then you're vulnerable to the possibility that their financial statements are full of lies. It happens to the most sophisticated of investors too, after Mercedes Daimler agreed to buy Chrysler they ended up filing charges of fraud against the Chrysler Board of Directors because their financial statements varied from exaggerations to outright fiction.
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But maybe another way to look at it is to compare investing with going to court. Yes, if you find yourself in court [either as a plaintiff or a defendant] you can elect to represent yourself. There is no obligation for you to have legal counsel.
But the law is complex, subtle, can turn on subtle interpretations and can be powerfully argued by an expert well versed in both statute and relevant case law.
If you found yourself required to go to court on a matter that could have
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And that's a lot of work, so the friends who are really good at it are going to invest a lot of hours. You should buy them a bottle of wine. And since the marginal cost of them sharing the work approaches zero, they can do that for a lot of friends. That's a lot of bottles of wine! And then, that's too many to drink, so maybe they sell some bottles. But that's inefficient to buy and then res
Comment removed (Score:4, Insightful)
Re:One little detail... (Score:4, Interesting)
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Nothing about a blockchain makes protections for invalid trades/pricing/etc. undoable. You can totally build a blockchain with revockable transactions (given well-established criteria.
Not that that matters too much to me, because my trades all go through a federally monitored trading house that has its own liability rules - their software's liability on the NYSE isn't my concern.
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What's the value of the blockchain with a centralized signer? Why not just have the signer list all account balances?
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With a transparent block-chain, most of those procedural regulations go away because the only way to control the money is to control the secret, and the secret is kept
What problem is the blockchain addressing? (Score:2)
Next (Score:2)
Next we will be buying/selling company shares in Amazon/Ebay