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The US can battle wealth inequality by letting startups IPO earlier
- maxcan 14y agoThis article had so much potential until it stumbled into the curious idea of increasing tick sizes to increase liquidity. Coming from the author, MP at Andreessen plus time on Wall Street, this is especially shocking. I'm happy to get into the math of this if someone wants, but decimalization didn't kill penny stock trading. If anything, the SEC coming down hard on pump and dump schemes is what killed it. Arguably, this wasn't really a bad thing. The real way to promote small cap IPOs isn't to artificially increase the bid-ask spread via de-decimalization but to decrease the insanely high fixed costs of going public brought on by regulation like Sarbanes Oxley and friends. Other countries are wising up to this and enabling small cap listing (SGX catalist for example). Hopefully the SEC wakes up soon too. I'm not optimistic.
- mifeng 14y agoTotally agree. His argument basically boils down to this: because the banks can't rip off retail investors by making at least $0.25 per share traded, they can't be bothered to trade and issue research on smaller stocks. Boo-freaking-hoo.