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This seems like bad news for regular investors, and good news for insiders. Reporting is burdensome, sure, but being listed on public exchanges is not a requir

This seems like bad news for regular investors, and good news for insiders. Reporting is burdensome, sure, but being listed on public exchanges is not a requirement.

nonethewiser 6mo ago
Makes companies short-sighted though. I wouldn't say that's necessarily good for regular investors.
- deleted 6mo ago
  [deleted]
- Salgat 6mo ago
  I wonder if requiring it twice a month would fix both issues, since it's too frequent to plan around (versus quarterly), while frequent enough to allow transparency (versus annually).
- lotsofpulp 6mo ago
  Where is the proof? All the businesses with the highest demand for their shares are clearly not short-sighted. Share buyers are clearly rewarding investing for the long term, even with quarterly reporting.
  - epolanski 6mo ago
    > All the businesses with the highest demand for their shares are clearly not short-sighted. Where is the proof? As long as CEOs and executives compensation is tied to stock performance, which is highly tied to news and short term results, basic economics and game theory suggests that short-sightedness is indeed encouraged. This is especially problematic for businesses where plannings have to be done 4/5/6+ years in advance like auto industry, aircrafts or semi conductors. It takes an awful lot of time and money to plan a new processor architecture and build an ecosystem around it, from chip manufacturing to packaging.
    - lotsofpulp 6mo ago
      https://companiesmarketcap.com/ https://companiesmarketcap.com/ Go down that list and you can see almost all those businesses are ones that plowed and continue to plow billions of dollars into investments that will not pan out for many years. I don’t think any of the top ones got to where they were with quarter to quarter goals.
      - epolanski 6mo ago
        That's not proof of anything and most of the companies you find there are cashing on decades old businesses whether it's oil, ads or iPhones.
        lotsofpulp 6mo ago
        “Cashing in” is on bets made many years ago is making my point. Amazon didn’t stop once it had the book market or even the online retail market (see AWS), Apple didn’t stop with ipod or iphone (see M processors/Airpods/Watch/etc), Meta didn’t stop with Facebook (see instagram/whatsapp/VR), Alphabet didn’t stop with Google (Waymo, Gmail, Drive), Eli Lilly with GLP-1 trials, etc. They could stop, and switch to quarter to quarter decision making and juice their numbers even more. Maybe they will, and then eventually those businesses will drop in the rankings (IBM/GE/etc). But the idea that quarterly reporting makes businesses short sighted is clearly false. Leaders with short term motivations makes businesses short sighted (obviously). Sometimes, that’s justified because the business sector is winding down, sometimes it’s due to incompetence, and sometimes it’s due to greed.
        epolanski 6mo ago
        You know I can easily give you plenty of counter examples of decisions made for short term gains and stock pumping, right? At the end of the day most of these CEOs are valued by the stock price and they need to follow investors expectations which are very often short sighted. Intel, Boeing and countless others are obvious examples. All the companies you listed went the "let's cut personnel or bets even if we're making gazzilions to appease the stock market".
arduanika 6mo ago
Listing on a public exchange is not a requirement, but it is generally a boon to the public interest. The theory is that if we close the gap in regulatory burden between public companies and large private companies, then maybe we'll see more IPOs like back in the 90's, before Sarbanes-Oxley and other new laws. Now, with an admin that's disposed to deregulation, the usual approach to closing that gap is to loosen requirements on public companies. You don't see a lot of people advocating for closing the other half of the gap, where we increase the reporting requirements on private companies. Stricter requirements there seem justified if you look with a bit of realism at how many consumer-facing funds are holding little pieces of unicorns. A lot of people have a stake in SpaceX or Stripe, one way or another. I'd like to see at least a few proposals that make it less comfortable to stay private for so long.
- doom2 6mo ago
  > The theory is that if we close the gap in regulatory burden between public companies and large private companies, then maybe we'll see more IPOs like back in the 90's, before Sarbanes-Oxley and other new laws. And maybe more Enrons?
  - arduanika 6mo ago
    Yes, maybe. The optimal number of scandals is sadly not zero, and any given piece of legislation tends to overreact, fighting the last battle without seeing all the potential second-order consequences. Even the most carefully-crafted laws are worth giving another look, periodically. Note that FTX, for example, was privately held. If it had been born in the nineties, the norm would be for it to go public, and have at least a modicum of disclosure; staying private would have been weird, a red flag. Instead, "our generation's Enron" had no public markets oversight whatsoever, SOX or otherwise. So yeah, it's necessary to find a balance. You are choosing between a little regulation on a lot of companies, or a lot of regulation on a smaller and smaller chunk of the economy each year.
    - riffraff 6mo ago
      But Enron's bankruptcy affected people who could invest on the public market while FTX affected more directly "qualified investors" didn't it? It seems the private/public split along the lines of "public companies should be more scrutinized" worked as intended.
criddell 6mo ago
> being listed on public exchanges is not a requirement Aren’t there some factors that require a company to go public? For example, I think there’s a limit on the number of investors (1000?).
nemo44x 6mo ago
It’s in the best interest for companies to list publicly though. We want as many people in the country invested in as many good companies. Equity in the country is mutual self interest. Similar to why we want a nation of home owners, not renters.
anonu 6mo ago
> being listed on public exchanges is not a requirement it used to be raise money. now that money is done privately. the result exacerbates the gap between private and public markets and ultimately between rich and poor. Private market participation is usually for accredited investors where you need $1m net worth. Public markets are one of the best ways to create wealth in the US, if the historical record is any hint about the future. Fewer public companies gives regular investors less choice. So if you're a private company and you have 1/2 as many reports to file each year, well now you have a slightly less onerous reporting regime and slightly tilts in favor of going public.
- epolanski 6mo ago
  > it used to be raise money. now that money is done privately. Not anymore, private markets are quite illiquid right now.
- KK7NIL 6mo ago
  > it used to be raise money. What in heavens gave you that idea? A well developed public stock market is such a new (and American thing) and it still makes up a small amount of the capital raised by businesses. Even within large public companies, there's significant use of bank/private debt.

This seems like bad news for regular investors, and good news for insiders. Reporting is burdensome, sure, but being listed on public exchanges is not a requirement.

nonethewiser 6mo ago

Makes companies short-sighted though. I wouldn't say that's necessarily good for regular investors.

deleted 6mo ago
[deleted]
Salgat 6mo ago
I wonder if requiring it twice a month would fix both issues, since it's too frequent to plan around (versus quarterly), while frequent enough to allow transparency (versus annually).
lotsofpulp 6mo ago
Where is the proof? All the businesses with the highest demand for their shares are clearly not short-sighted. Share buyers are clearly rewarding investing for the long term, even with quarterly reporting.
- epolanski 6mo ago
  > All the businesses with the highest demand for their shares are clearly not short-sighted. Where is the proof? As long as CEOs and executives compensation is tied to stock performance, which is highly tied to news and short term results, basic economics and game theory suggests that short-sightedness is indeed encouraged. This is especially problematic for businesses where plannings have to be done 4/5/6+ years in advance like auto industry, aircrafts or semi conductors. It takes an awful lot of time and money to plan a new processor architecture and build an ecosystem around it, from chip manufacturing to packaging.
  - lotsofpulp 6mo ago
    https://companiesmarketcap.com/ https://companiesmarketcap.com/ Go down that list and you can see almost all those businesses are ones that plowed and continue to plow billions of dollars into investments that will not pan out for many years. I don’t think any of the top ones got to where they were with quarter to quarter goals.
    - epolanski 6mo ago
      That's not proof of anything and most of the companies you find there are cashing on decades old businesses whether it's oil, ads or iPhones.
      - lotsofpulp 6mo ago
        “Cashing in” is on bets made many years ago is making my point. Amazon didn’t stop once it had the book market or even the online retail market (see AWS), Apple didn’t stop with ipod or iphone (see M processors/Airpods/Watch/etc), Meta didn’t stop with Facebook (see instagram/whatsapp/VR), Alphabet didn’t stop with Google (Waymo, Gmail, Drive), Eli Lilly with GLP-1 trials, etc. They could stop, and switch to quarter to quarter decision making and juice their numbers even more. Maybe they will, and then eventually those businesses will drop in the rankings (IBM/GE/etc). But the idea that quarterly reporting makes businesses short sighted is clearly false. Leaders with short term motivations makes businesses short sighted (obviously). Sometimes, that’s justified because the business sector is winding down, sometimes it’s due to incompetence, and sometimes it’s due to greed.
        epolanski 6mo ago
        You know I can easily give you plenty of counter examples of decisions made for short term gains and stock pumping, right? At the end of the day most of these CEOs are valued by the stock price and they need to follow investors expectations which are very often short sighted. Intel, Boeing and countless others are obvious examples. All the companies you listed went the "let's cut personnel or bets even if we're making gazzilions to appease the stock market".

arduanika 6mo ago

Listing on a public exchange is not a requirement, but it is generally a boon to the public interest. The theory is that if we close the gap in regulatory burden between public companies and large private companies, then maybe we'll see more IPOs like back in the 90's, before Sarbanes-Oxley and other new laws. Now, with an admin that's disposed to deregulation, the usual approach to closing that gap is to loosen requirements on public companies. You don't see a lot of people advocating for closing the other half of the gap, where we increase the reporting requirements on private companies. Stricter requirements there seem justified if you look with a bit of realism at how many consumer-facing funds are holding little pieces of unicorns. A lot of people have a stake in SpaceX or Stripe, one way or another. I'd like to see at least a few proposals that make it less comfortable to stay private for so long.

doom2 6mo ago
> The theory is that if we close the gap in regulatory burden between public companies and large private companies, then maybe we'll see more IPOs like back in the 90's, before Sarbanes-Oxley and other new laws. And maybe more Enrons?
- arduanika 6mo ago
  Yes, maybe. The optimal number of scandals is sadly not zero, and any given piece of legislation tends to overreact, fighting the last battle without seeing all the potential second-order consequences. Even the most carefully-crafted laws are worth giving another look, periodically. Note that FTX, for example, was privately held. If it had been born in the nineties, the norm would be for it to go public, and have at least a modicum of disclosure; staying private would have been weird, a red flag. Instead, "our generation's Enron" had no public markets oversight whatsoever, SOX or otherwise. So yeah, it's necessary to find a balance. You are choosing between a little regulation on a lot of companies, or a lot of regulation on a smaller and smaller chunk of the economy each year.
  - riffraff 6mo ago
    But Enron's bankruptcy affected people who could invest on the public market while FTX affected more directly "qualified investors" didn't it? It seems the private/public split along the lines of "public companies should be more scrutinized" worked as intended.

criddell 6mo ago

> being listed on public exchanges is not a requirement Aren’t there some factors that require a company to go public? For example, I think there’s a limit on the number of investors (1000?).

nemo44x 6mo ago

It’s in the best interest for companies to list publicly though. We want as many people in the country invested in as many good companies. Equity in the country is mutual self interest. Similar to why we want a nation of home owners, not renters.

anonu 6mo ago

> being listed on public exchanges is not a requirement it used to be raise money. now that money is done privately. the result exacerbates the gap between private and public markets and ultimately between rich and poor. Private market participation is usually for accredited investors where you need $1m net worth. Public markets are one of the best ways to create wealth in the US, if the historical record is any hint about the future. Fewer public companies gives regular investors less choice. So if you're a private company and you have 1/2 as many reports to file each year, well now you have a slightly less onerous reporting regime and slightly tilts in favor of going public.

epolanski 6mo ago
> it used to be raise money. now that money is done privately. Not anymore, private markets are quite illiquid right now.
KK7NIL 6mo ago
> it used to be raise money. What in heavens gave you that idea? A well developed public stock market is such a new (and American thing) and it still makes up a small amount of the capital raised by businesses. Even within large public companies, there's significant use of bank/private debt.