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Yet letting Uber's bag holders dump their stock on the public was ethically correct? Don't pretend our current system of only letting the rich get richer by ban

Yet letting Uber's bag holders dump their stock on the public was ethically correct? Don't pretend our current system of only letting the rich get richer by banning access to early-stage ventures is the best society can do.

r00fus 7y ago
I'm not the biggest Uber fan, but you could say that about any IPO. Uber at the time was (and is) a going concern with an actual product, not a random token/coin.
arcticbull 7y ago
All of the data necessary for anyone to make an informed purchasing decision about $UBER is available per SEC regulation. It's up to each individual to decide based on that whether or not it represents a good value, and to hit "buy" on their preferred trading platform, and at what price. Nobody was forced to buy $UBER, and nobody was lied to, and if they were, they've got plenty of recourse via the SEC. Everything of value was in the S-1 for months before the first trading day. Nobody is banned from investing in early-stage businesses except by virtue of their level of risk tolerance, and some of us angel invest regularly. However, just opening up access to everyone doesn't change the fact that a legitimate, well-funded company with great traction and a great idea (the kind of equity you want) has no interest in selling to some random small-time individual with no experience to bring to bear. As a founder, in early stages, I'd want smart money. Just as nobody was required to purchase $UBER nobody is required to sell shares of their startup to small-time investors who have no idea what they're doing and provide no value. I predict if accreditation rules were removed, the same pool of smart money continues to get all the wins, but now dumb money holds all the bags. Yes, it's possible to make bad investing decisions. That certainly doesn't mean ICOs are a good idea.
- seibelj 7y ago
  Thank you for describing our current system to me. I am advocating for a new system that lets people take more risk even if they are not wealthy. There is nothing magical that happens when you make $200k per year, if you make $199,999 per year you are not an idiot that needs the government to protect you from bad investments.
  - arcticbull 7y ago
    To be clear the system you're asking for exists, it was brought in by Obama as part of the JOBS act. Anyone can buy equity under the JOBS act and the company has far lower documentation requirements. The 'good' companies (in-demand equity) don't do it because they won't want to pollute their cap tables with 'dumb money' and the ones who are okay with that are terrible investments. It's adverse selection. [1] Getting rich isn't easy and opening up unregulated access to crap securities isn't going to change that. [1] https://www.finra.org/investors/alerts/crowdfunding-and-jobs-act-what-investors-should-know https://www.finra.org/investors/alerts/crowdfunding-and-jobs...
    - seibelj 7y ago
      To be clear, the moment one is accredited they can make all the dumb investment decisions they would like. However, beneath a magical line of $200k per year salary the government prevents you by legal force from doing so. When you make above that number you are free to be dumb. I'm advocating letting everyone make their own decisions, for better or worse.
      - arcticbull 7y ago
        You seem to have ignored the key points. (1) A program that meets that vast majority of your requirements exists and exhibits terrible adverse selection issues, so you propose... expanding it? In the hopes it gets... better? Any thoughts on why that would happen? (2) The $200K salary line is "magical" but does represent middle-class in 100% of communities in the United States. IMO it should have been indexed to inflation ($3-4M in annual income inflation adjusted), bringing it quite a bit higher. You can also qualify on the basis of $1M in assets excluding your principal residence. This provides adequate buffer in the event your investments fail outright, which the vast majority of early stage investments do. It's the same reason a 20.9 year old can't buy beer. You draw the line somewhere, for better or for worse. (3) To the best of my knowledge there are no legal repercussions for you for investing as a non-accredited investor, though there may be for the company for failing to follow proper procedure. (4) These laws weren't brought in because too many poor were getting rich too fast and there wasn't enough room for all the yachts in Boston Harbor. It was due to large-scale speculation literally causing the great depression [1]. (5) Remind me who pays for the welfare programs when people who aren't in a place to take financial risks, the most desperate usually, are pushed into insolvency? Taxpayers. That's why taxpayers also get a say in who can invest. (6) Your argument reads a lot like the people who want to kill off the EPA because the rivers haven't caught fire in a while. There's a reason they don't catch fire. [1] https://www.investopedia.com/terms/n/nonaccreditedinvestor.asp https://www.investopedia.com/terms/n/nonaccreditedinvestor.a...
mbesto 7y ago
> Don't pretend our current system of only letting the rich get richer by banning access to early-stage ventures is the best society can do. It's not, but that's not the point. Offering unfettered access to investing with zero regulation is exactly how more of the Bernie Madoff's of the world would exist. You think the rich are getting richer under the current system now? Just imagine the number of grifter's that would get richer by swindling large swathes of common folk.
citruspi 7y ago
> Yet letting Uber's bag holders dump their stock on the public was ethically correct? No one dumped their stock on the public. They offered to sell it and someone offered to purchase it. (Granted, "the public" has some ownership because it likely ended up in several funds that people are invested in). But on an individual transaction level, someone sought to buy it at a price and someone else sought to sell it at that price. What's the problem with that transaction? That's how every IPO, and to a greater extent - "the market," works.
sdinsn 7y ago
They are only able to dump their stock if someone is willing to buy it.

r00fus 7y ago

I'm not the biggest Uber fan, but you could say that about any IPO. Uber at the time was (and is) a going concern with an actual product, not a random token/coin.

arcticbull 7y ago

All of the data necessary for anyone to make an informed purchasing decision about $UBER is available per SEC regulation. It's up to each individual to decide based on that whether or not it represents a good value, and to hit "buy" on their preferred trading platform, and at what price. Nobody was forced to buy $UBER, and nobody was lied to, and if they were, they've got plenty of recourse via the SEC. Everything of value was in the S-1 for months before the first trading day. Nobody is banned from investing in early-stage businesses except by virtue of their level of risk tolerance, and some of us angel invest regularly. However, just opening up access to everyone doesn't change the fact that a legitimate, well-funded company with great traction and a great idea (the kind of equity you want) has no interest in selling to some random small-time individual with no experience to bring to bear. As a founder, in early stages, I'd want smart money. Just as nobody was required to purchase $UBER nobody is required to sell shares of their startup to small-time investors who have no idea what they're doing and provide no value. I predict if accreditation rules were removed, the same pool of smart money continues to get all the wins, but now dumb money holds all the bags. Yes, it's possible to make bad investing decisions. That certainly doesn't mean ICOs are a good idea.

seibelj 7y ago
Thank you for describing our current system to me. I am advocating for a new system that lets people take more risk even if they are not wealthy. There is nothing magical that happens when you make $200k per year, if you make $199,999 per year you are not an idiot that needs the government to protect you from bad investments.
- arcticbull 7y ago
  To be clear the system you're asking for exists, it was brought in by Obama as part of the JOBS act. Anyone can buy equity under the JOBS act and the company has far lower documentation requirements. The 'good' companies (in-demand equity) don't do it because they won't want to pollute their cap tables with 'dumb money' and the ones who are okay with that are terrible investments. It's adverse selection. [1] Getting rich isn't easy and opening up unregulated access to crap securities isn't going to change that. [1] https://www.finra.org/investors/alerts/crowdfunding-and-jobs-act-what-investors-should-know https://www.finra.org/investors/alerts/crowdfunding-and-jobs...
  - seibelj 7y ago
    To be clear, the moment one is accredited they can make all the dumb investment decisions they would like. However, beneath a magical line of $200k per year salary the government prevents you by legal force from doing so. When you make above that number you are free to be dumb. I'm advocating letting everyone make their own decisions, for better or worse.
    - arcticbull 7y ago
      You seem to have ignored the key points. (1) A program that meets that vast majority of your requirements exists and exhibits terrible adverse selection issues, so you propose... expanding it? In the hopes it gets... better? Any thoughts on why that would happen? (2) The $200K salary line is "magical" but does represent middle-class in 100% of communities in the United States. IMO it should have been indexed to inflation ($3-4M in annual income inflation adjusted), bringing it quite a bit higher. You can also qualify on the basis of $1M in assets excluding your principal residence. This provides adequate buffer in the event your investments fail outright, which the vast majority of early stage investments do. It's the same reason a 20.9 year old can't buy beer. You draw the line somewhere, for better or for worse. (3) To the best of my knowledge there are no legal repercussions for you for investing as a non-accredited investor, though there may be for the company for failing to follow proper procedure. (4) These laws weren't brought in because too many poor were getting rich too fast and there wasn't enough room for all the yachts in Boston Harbor. It was due to large-scale speculation literally causing the great depression [1]. (5) Remind me who pays for the welfare programs when people who aren't in a place to take financial risks, the most desperate usually, are pushed into insolvency? Taxpayers. That's why taxpayers also get a say in who can invest. (6) Your argument reads a lot like the people who want to kill off the EPA because the rivers haven't caught fire in a while. There's a reason they don't catch fire. [1] https://www.investopedia.com/terms/n/nonaccreditedinvestor.asp https://www.investopedia.com/terms/n/nonaccreditedinvestor.a...

mbesto 7y ago

> Don't pretend our current system of only letting the rich get richer by banning access to early-stage ventures is the best society can do. It's not, but that's not the point. Offering unfettered access to investing with zero regulation is exactly how more of the Bernie Madoff's of the world would exist. You think the rich are getting richer under the current system now? Just imagine the number of grifter's that would get richer by swindling large swathes of common folk.

citruspi 7y ago

> Yet letting Uber's bag holders dump their stock on the public was ethically correct? No one dumped their stock on the public. They offered to sell it and someone offered to purchase it. (Granted, "the public" has some ownership because it likely ended up in several funds that people are invested in). But on an individual transaction level, someone sought to buy it at a price and someone else sought to sell it at that price. What's the problem with that transaction? That's how every IPO, and to a greater extent - "the market," works.

sdinsn 7y ago

They are only able to dump their stock if someone is willing to buy it.