Can we stop calling them “capital markets”? This SEC decision puts the last nail in the coffin of the historical purpose of public markets: a place where investors channel capital to companies that need capital. It’s all just a casino now. Common stock is just a chip.https://twitter.com/stacey_cunning/status/1298768176101109763 …
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Replying to @EpsilonTheory
Can you elaborate on how direct listings push "capital markets" further into casino territory? Appreciate your views as always.
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Replying to @HideNotSlide
The company is not raising capital in a direct listing. Private shareholders in the company are selling their shares directly to you, typically the shares that do not have voting rights.
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Replying to @EpsilonTheory
Thanks for your thoughts. We'll see whether companies that go public via direct listing have lower returns relative to traditional IPOs. That would separate the "I need to dump my shares" crowd from the "I actually want to raise capital" crowd.
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Replying to @HideNotSlide
Sorry, but you’re missing the point. There’s no “dumping” of shares by insiders. They maintain the control shares and issue a bullshit class of common shares in a private offering to themselves, which they then (partially) float to the public. It’s a liquidity scheme. Period.
4 replies 0 retweets 18 likes
Got it. Thanks for clarifying. Even worse than I thought...
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