A new U.S. stock exchange with its eye on the long-term
Categories: technology, economy
What? A San Francisco-based technology entrepreneur is spearheading an effort to create a new U.S. stock exchange that supports long-term shareholding and business strategies. Eric Ries, author of The Lean Start-Up, is heading the for-profit effort to launch the Long-Term Stock Exchange (LTSE). The initiative wants to create a stock exchange that reduces investor emphasis on quarterly results and discourages high-frequency trading, two activities that can particularly hurt start-ups that go public. If approved by the U.S. Securities and Exchange Commission (SEC), LTSE-listed companies would have to adhere to all existing SEC-rules, and also ones unique to the LTSE, that would be SEC-enforced. These LTSE rules would include greater voting power to those who have held a stock for longer, and additional shareholder and company financial disclosures.
So what? The Long-Term Stock Exchange (LTSE) could significantly boost financial support for technologies that require long-development times, including the deployment of renewable energy technologies. Similarly, by setting a new return-on-investment timeframe, the LTSE would provide the opportunity for companies to invest in sustainability strategies that involve short-term losses to achieve long-term gains. The LTSE might also create greater market capitalization by providing a venue for individual investors who want to invest in substantive long-term projects and avoid market volatility. Institutional investors with a mandate for long-term stability, such as pension funds, may also be attracted by the companies listed on this stock exchange.