[HN Gopher] Twilio, Asana to List on Long Term Stock Exchange
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Twilio, Asana to List on Long Term Stock Exchange
Author : rayshan
Score : 74 points
Date : 2021-06-24 20:53 UTC (2 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| jonplackett wrote:
| 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?
| nbclark wrote:
| 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.
| endisneigh wrote:
| 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.
| eries wrote:
| 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.
| KaoruAoiShiho wrote:
| 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.
| eries wrote:
| It's definitely not for everybody!
| jimsimmons wrote:
| Wonder who the first exclusive listing is.
| eries wrote:
| Founder/CEO of LTSE here. Happy to answer questions if anyone
| wants to know more, AMA
| owl_troupe wrote:
| 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?
| eries wrote:
| 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.
| robert1er wrote:
| How correlated can we expect the LTSE performance and the stock
| performance on other exchanges to be?
| eries wrote:
| 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.
| toufka wrote:
| 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?
| eries wrote:
| 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!
| lwb wrote:
| Is it possible to invest in the LTSE itself?
| eries wrote:
| 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.
| liamcardenas wrote:
| 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.
| subroutine wrote:
| 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.
| eries wrote:
| 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.
| zackbloom wrote:
| 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?
| eries wrote:
| 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
| rawtxapp wrote:
| 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).
| eries wrote:
| 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
| [deleted]
| teruakohatu wrote:
| 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.
| eries wrote:
| 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.
| eloff wrote:
| > 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?
| pg_bot wrote:
| 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)
| tedunangst wrote:
| Rephrased: What specific benefit does printing "gluten free"
| on a can of tuna bring?
| oxymoran wrote:
| 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.
| acchow wrote:
| > their only goal is maximizing shareholder value in the
| short term.
|
| What about Amazon that operated on losses for many
| consecutive years?
| eries wrote:
| Thank you!
| kn0thing wrote:
| This is exciting. Who's next to list on LTSE???
| eries wrote:
| Stay tuned...
| aprao wrote:
| Reddit?
| throwawaysea wrote:
| 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
| somewhat vague when it says things like "The company's approach
| to diversity and inclusion" or "The company's impact on the
| environment and its community", so I am not sure what that
| implies. For instance, would you consider yourself a
| "progressive" financial institution?
| joecool1029 wrote:
| 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.
| eries wrote:
| 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
| atlasunshrugged wrote:
| 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.
| bberenberg wrote:
| 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?
| cft wrote:
| 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?
| wyxuan wrote:
| Any interest in allowing shares on the LTSE to trade directly
| on crypto exchanges?
| eries wrote:
| If/when the regulatory framework exists to do this in a
| compliant way, we would be open to it
| bedhead wrote:
| For people who value virtue signaling more than liquidity.
| Mat_Sherman wrote:
| What types of companies are able to list on LTSE?
| jmholla wrote:
| 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.
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