Has the Stock Market Become Less Representative of the Economy?

By Frederik P. Schlingemann and René M. Stulz October 19, 2020 by renholding

In the summer of 2020, with the U.S. economy bearing the impact of the COVID-19 pandemic, the unemployment rate was as high as it had been any time since 1948, and the NASDAQ and the S&P 500 indices reached their …

Insider Trading and Geographic Proximity: Evidence from Covid-19

By Erin Henry, George A. Plesko and Caleb Rawson September 1, 2020 by renholding

The COVID-19 pandemic has dramatically changed how businesses operate, resulting in unprecedented stock market effects. While the U.S. stock market has historically shown little to no reaction to an infectious disease outbreak, COVID-19 precipitated a global stock market downturn now …

Davis Polk Discusses New Developments on Direct Listings

By Marcel Fausten, Michael Kaplan, Emily Roberts, Richard Truesdell and Elizabeth Weinstein September 1, 2020 by renholding

New developments last week will allow companies to raise funds in a direct listing. On Wednesday, the Securities and Exchange Commission (SEC) approved the NYSE’s rule change that will permit companies to raise capital in a direct listing. Prior to …

Arnold & Porter Discusses SEC Approval of NYSE Direct Listings Proposal

By Carol Anne Huff August 31, 2020 by renholding

The SEC has given the New York Stock Exchange (NYSE) clearance to allow companies to raise capital in connection with a direct listing on the NYSE. A direct listing is an alternative to a traditional underwritten IPO that allows a …

Lessons from Luckin Coffee: The Underappreciated Risks of Variable Interest Entities

By Jonathan Barnett July 28, 2020 by renholding

On April 2, China’s Luckin Coffee announced that some of its employees, including the chief operating officer, had fabricated over $300 million in reported revenues. On April 21, the Securities and Exchange Commission and the U.S. Public Company Accounting Oversight …

The Social Functions of the Stock Market: A Primer

By Merritt B. Fox April 12, 2019 by renholding

A stock market is a key feature found in any economy with a substantial private sector. For example, in the United States, we see the New York Stock Exchange and Nasdaq, in the U.K, the London Stock Exchange, and in …

Why “Sunset” Provisions for Dual Class Stock Are Not the Answer

By David J. Berger March 29, 2019 by renholding

On March 28, 2019 the Nasdaq Listing Council invited me to respond to the recent proposal by the Council of Institutional Investors (“CII”) to Nasdaq, requesting it to adopt a rule requiring any company going public with dual class shares …

Poison Pills and the 20 Percent Rule—a Dangerous Cocktail?

By Andrew G. Khanarian March 8, 2019 by renholding

Amidst the clamorous and wide-ranging debate over poison pills, few commentators have addressed whether these corporate defenses are consistent with NYSE’s and NASDAQ’s well-known prohibitions against large issuances absent shareholder approval (the “20 Percent Rule”). While poison pills are often …

Dual Class Stock: What Is a Fair Compromise?

By John C. Coffee, Jr. December 17, 2018 by renholding

In my last post[1], I focused on the Council of Institutional Investors’ (“CII”) recent proposal to the New York Stock Exchange and Nasdaq to impose a listing condition that any super-voting rights on dual class stock must expire …

Dual Class Stock: The Shades of Sunset

By John C. Coffee, Jr. November 19, 2018 by renholding

The most important issue in corporate governance today is dual class capitalization, and the most important recent development is the petition submitted on October 24, 2018 by the Council of Institutional Investors (“CII”) to both the New York Stock Exchange …

SEC Commissioner Jackson on the State of America’s Stock Markets

By Robert J. Jackson, Jr. September 20, 2018 by renholding

Thank you so much, J.W. [Verret] and Ty [Gellasch], for that incredibly kind introduction. It’s a real honor to be here with you both today at George Mason, talking about the only issue you two have ever agreed on.[*

…

How Exchange Listing Affects Corporate Governance

By Dan W. French, Andrew E. Kern, Thibaut G. Morillon and Adam S. Yore June 25, 2018 by renholding

On April 3, 2018, the Swedish online music company Spotify Technology disrupted the traditional initial public offering (IPO) marketplace when it directly listed its shares on the New York Stock Exchange (NYSE) under the ticker symbol “SPOT.” With a valuation …

How to Regulate Bitcoin Futures

By Margaret Ryznar April 26, 2018 by renholding

Bitcoin is a currency, technology, and, most recently, futures product. Several clearinghouses have allowed bitcoin futures trading. For example, CBOE launched trading in bitcoin futures on December 10, 2017, while CME Group did so a week later.[1] NASDAQ and …

Changes in Corporate Governance: Externally Dictated vs. Organically Determined

By Onur K. Tosun February 20, 2018 by renholding

Several major corporate scandals in the United States during the early 2000s brought attention to corporate governance of large U.S. companies. As a result, Congress passed the Sarbanes-Oxley Act (SOX), and the Securities and Exchange Commission (SEC) announced several regulations …

The Spotify Listing: Can an “Underwriter-less” IPO Attract Other Unicorns?

By John C. Coffee, Jr. January 16, 2018 by renholding

Press reports indicate that Spotify, the music streaming company, is planning an initial public offering in March or April of this year, and that it plans to use a novel “direct listing” approach that has not previously been used at …

Morrison & Foerster explains New Nasdaq Rules on Disclosure of Third-Party Payments to Directors

By Marty Dunn, Scott Lesmes and Rose Zukin August 2, 2016 by renholding

In March 2016, the Nasdaq Stock Market LLC (“Nasdaq”) proposed new rules regarding disclosure of third-party compensation of directors. This third-party compensation, which may not be publicly disclosed, arises when a party other than the issuer, such as an activist …

Private Equity’s Unintended Dark Side

By Alexander Ljungqvist, Lars Persson and Joacim Tåg February 17, 2016 by ilyabeylin

Private equity is often seen as an agent of creative destruction, helping resources to be reallocated to more productive uses. Private equity firms help improve the financial performance and operational efficiency of the companies they acquire, and plenty of academic …

Approaching Deadline for Nasdaq-Listed Companies to Implement New Compensation Committee Standards

By Richard E. Baltz, Julia Vax and Michael J. Rosenthall May 16, 2013 by Jason Parsont

As annual meeting season approaches, so too does the first deadline for companies listed on the NASDAQ Stock Market (Nasdaq) to comply with amended compensation committee rules. Traditionally, evaluation of director independence of Nasdaq-listed companies differed for purposes of serving …

The Case for a Junior Equity Market

By Jeff Schwartz May 15, 2013 by Jason Parsont

The following post comes from Professor Jeff Schwartz of the University of Utah S.J. Quinney College of Law:

The influential SEC Advisory Committee on Small and Emerging Companies recently approved a new set of recommendations. The boldest among them is …

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