Long-Term Stock Exchange pushes for more U.S. IPOs to widen retail investor access

Traders Union
All News
Financial Institutions
LTSE pushes for more IPOs

Highlights

LTSE aims to increase early-stage public listings, addressing the drop to 135 U.S. IPOs last year from over 270 twenty years ago.
LTSE mandates listed firms to publish policies on long-term value creation, stakeholder engagement, and executive compensation alignment with long-term performance.
LTSE argues that delayed IPOs restrict retail investor access and retirement savings growth, citing Amazon’s IPO: $1,000 invested is now worth about $1.2 million.

LTSE model targets earlier public listings

As reported by Long-Term Stock Exchange, the venue is positioning itself as the only U.S. stock exchange built primarily for companies and investors with long-term horizons, with the aim of encouraging more businesses to list publicly while they are still in earlier growth stages.

The text says about 135 companies went public in the U.S. last year, less than half the level seen 20 years earlier. It argues that abundant private capital now allows high-growth companies to raise funding without selling shares to public investors during their formative years, narrowing access for households that cannot invest in private equity, venture capital and other alternative assets.

LTSE says listed companies are required to develop and publish policies on long-term value creation. Those policies are meant to cover stakeholder consideration, long-term decision-making, executive and director pay alignment with long-term performance, board oversight of long-term strategy and engagement with long-term shareholders.

Retirement savings and market access at stake

Restricted access to private markets can carry consequences for retirement outcomes because many workers depend on stock-linked savings for future income. The text says 51% of private-sector workers in the U.S. have a 401(k) as the only pension offered by their employer, while more than two-thirds of assets in such plans are invested in stocks on average.

Eric Ries, founder and a director of LTSE, says the funding model for economic growth has shifted away from ordinary retirement savers toward wealthy private investors. The article also cites CFA Institute capital markets policy director Sviatoslav Rosov, who says public markets have increasingly become listing venues for mature companies rather than engines of economic growth.

To illustrate the missed upside for retail investors, the text points to Amazon's IPO 22 years ago, saying a $1,000 investment held since listing would now be worth roughly $1.2 million. LTSE argues that bringing a new generation of companies to public markets sooner would allow both Wall Street and Main Street to benefit from future growth.

In our earlier article on Vanguard’s First Index Investment Trust (later the Vanguard 500), we traced how a product that struggled at its 1976 launch ultimately scaled into a cornerstone of retail investing. We also noted that while index funds broaden market access, rising market concentration has increased investors’ exposure to a small set of dominant mega-cap companies.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.