Here’s a trade:

1. You start a company and sell 100 shares of stock for $1 each, $100 total.
2. You use the $100 to buy ______. Now your company has $100 worth of ______ and nothing else, for a net asset value of $100.
3. The stock market is enthusiastic about ______, so your stock trades up to $2 per share (a 100% premium to net asset value), for a $200 market cap.
4. You sell 50 more shares of stock for $2 each, raising another $100.
5. You use the $100 to buy more ______. Now you have $200 worth of ______, for a net asset value of $200. And you have 150 shares outstanding, for a net asset value per share of $1.33.
6. Your stock trades up to $2.66 per share (still a 100% premium to net asset value), giving you a market cap of $400. 
7. You sell 50 more shares of stock for $2.66 each, $133 total, and use the money to buy more ______.
8. Shareholders are ecstatic. “This company keeps increasing its ______ per share, using a smart capital markets strategy to compound shareholder value. Therefore it should trade at a durable premium to net asset value, because if you buy ______ yourself you just get a static amount of ______, but if you buy shares of the company you get an ever-increasing amount of ______.”

Are there any flaws in this logic? Discuss. If you fill in the ______ with “Bitcoin,” you get the Strategy strategy, which has worked pretty well in large size for a long time, though the premium has come down recently. It worked so well for Strategy that it spawned many imitators, some of whom also put Bitcoin in the ______, but others have used Ethereum or Trumpcoin or Dogecoin or gold or GameStop stock.

Ideally you would put something jazzy and fun in the ______; I have said that it should be “crypto-adjacent.” But the main point that I want to make, in laying out this strategy, is that it barely matters what you put in the ______. The entire trade here is the capital markets strategy: If you can issue stock at a premium to buy more assets, you can increase your net asset value per share, which circularly justifies the premium. It is a nice tailwind if the assets you are buying go up in value, but it is not essential. [1]  The strategy can work with anything valuable.

For instance, most straightforwardly, money is valuable. What about like “I will sell stock at a premium and put the cash in a bank account, and because I am selling stock at a premium my cash value per share will keep increasing, so I can continue to sell stock at a premium”? Discuss! Is this too cute? What about stablecoins? Stablecoins are surely at least crypto-adjacent. What about “I will sell stock at a premium to pursue a crypto treasury strategy, and the crypto token that I will put in my treasury is a US dollar stablecoin”? What about it? What about it!

I hope someone will do that because it is the single best and stupidest trade that I have ever proposed in this column. I should quit my job and launch a Tether treasury company. As far as I can tell no one has done this yet. I did get a press release today from a company called StableX Technologies Inc., which changed its name from AYRO Inc. two weeks ago “to better reflect its strategic transformation and new primary focus on investing in foundational tokens that power the rapidly growing stablecoin industry.” And I got my hopes up! But, no, it’s like this:

StableX Technologies, Inc., formally AYRO, Inc. (NASDAQ:SBLX) ("StableX" or the "Company"), today announced that it initiated a purchase of FLUID tokens, which marks the Company's first purchase since announcing its focus on investing in foundational tokens that power the rapidly growing stablecoin industry.

"Our first token purchase of FLUID signifies the beginning of an important new chapter for StableX," said James Altucher, StableX's Digital Treasury Asset Manager. "In less than a year, FLUID has gone from zero to being a market leader in stablecoin trading, generating millions in monthly fees and growing its community at an extraordinary pace. Due to the sharp increase in fee volume, FLUID announced it will begin using all of its revenue to buy back tokens as of October 1, 2025, which we believe will be a major catalyst for FLUID's token price growth. While the purchase of FLUID represents StableX's first investment into a portfolio of tokens that power the fast-growing stablecoin industry, we look forward to providing updates to stakeholders as we begin to execute our planned expansion of this portfolio with additional purchases of high-value assets within the stablecoin industry. The launch of our previously announced strategy using FLUID as our first purchase underscores the benefit in acquiring tokens that are foundational to the stablecoin industry. As the industry continues its acceleration, we believe that our token purchase strategy will be a major beneficiary, delivering value to all of our stakeholders."

FLUID is, crushingly, not a stablecoin; it’s the, you know, equity/governance token of a decentralized crypto lending and trading protocol. StableX is not quite a stablecoin treasury company; it doesn’t sell stock to buy stablecoins, it sells stock to buy “tokens that power the fast-growing stablecoin industry.” Still! We’re so close.

Elsewhere, sure:

Traders are piling into a corrugated packaging company that will buy tokens linked to OpenAI chief Sam Altman’s iris-scanning crypto group, sending its shares soaring 3,000 per cent in a single day.

Eightco Holdings, which sells custom packaging products and also has a unit focused on ecommerce inventory management, said on Monday it would implement a “first-of-its-kind” strategy to scoop up Worldcoin tokens, which form a key part of Altman’s World digital identity project.

It’s going to change its ticker symbol to ORBS.

One theme that we have discussed around here recently is the “AI rollup.” A “rollup” is where one buyer buys up a bunch of different small companies in the same industry, with the theory being that (1) scale is good but also (2) the buyer has some sort of general-purpose skill or technology that it can apply to each company to make them all more efficient. Classically rollups are done by private equity firms, on the theory that the private-equity playbook — financial leverage, cost-cutting, incentive alignment, putting recent Harvard MBAs in charge of plumbing businesses — is broadly applicable and can make many businesses better.

But the recent trend is for AI rollups, often done by venture capital firms, where instead of throwing Harvard MBAs at a bunch of small companies, you throw generative artificial intelligence models at them. More abstractly, the point is that if you have a powerful general-purpose business technology that requires some scale and sophistication to implement — like AI or leveraged finance — then you can create value by being big and sophisticated enough to apply the technology and buying firms that aren’t.

Another theme that we used to discuss a lot around here, but not for years and years and years, was “blockchain blockchain blockchain.” The idea, as I dimly remember it, is that “the blockchain” — the set of distributed ledger technologies popularized by Bitcoin — was going to revolutionize business and technology. With blockchain technologies, banks would be able to … transfer money … and stock exchanges would be able to … trade stocks … I don’t know, people really were excited about all of this but for the life of me I can’t remember why. The conventional wisdom now is that everyone forgot about the blockchain the minute ChatGPT was released. Blockchain had some theoretical revolutionary potential that was always just around the corner, but generative AI gave you a chat window where you could ask questions and get answers. It’s a lot more tangible. So all the crypto VCs became AI VCs.

But if you took the blockchain stuff seriously, there is a way to combine these two themes. The combination is: blockchain rollup. You start a private equity fund, you raise money, and you go out and buy small accounting or pest-control or plumbing or whatever businesses. And then you apply your powerful sophisticated general-purpose technology — in this case, blockchain — to making those businesses more efficient. And because blockchain is so powerful, and hard for plumbers or accountants to deploy, you can create a lot of value this way.

This particular idea had never occurred to me, for reasons, but here’s a Wall Street Journal story about someone doing a blockchain rollup:

New York-based Inversion Labs plans to acquire low-margin companies, outfit them with blockchain to juice efficiency and then reap the profits that follow.  ...

“This technology is powerful, but the reality is crypto doesn’t have that many active users,” Inversion co-founder and Chief Executive Officer Santiago Roel Santos said. “Our North Star is to make crypto invisible to our users. They won’t see how the technology works, but they’ll feel the impact. It’s going to be faster, better and cheaper.” …

Inversion will target both private and public companies with large user bases that have internal infrastructure they believe is ripe for a blockchain overhaul, Dannheim said. 

“You can acquire and either bolt in a product that’s going to grow revenue or you can rip out a bad, poor operating system and plug in a better one that lives on a blockchain,” Dannheim said.

Inversion has initially targeted South American telecommunications companies and has submitted several acquisition bids. Blockchain could allow these companies to lower their data purchasing costs, among other improvements, Dannheim said. 

Why not. Back in the glory days of blockchain blockchain blockchain (2017), I got several press releases a week from Dentacoin, the blockchain for dentists. Perhaps there’s a rollup play there too.

Investment banking is a business-to-business business. Mergers-and-acquisitions bankers help companies acquire other companies, or sell themselves to other companies; good M&A bankers have good relationships with the big companies and private-equity sponsors in their coverage industry. Capital markets bankers help companies raise money by selling stock or bonds to institutional investors; good capital markets bankers know the companies they cover and also the institutional investors who might want their securities.

But they don’t know everyone. Your dentist might want to buy 10 shares of Stripe, if Stripe ever goes public. The tech equity capital markets bankers at Goldman Sachs and Morgan Stanley don’t know your dentist. They don’t take her out to dinner to get her thoughts on the market; they don’t put her picture or the logo of her dental practice on the “Targeted Investors” page in the pitchbook they use to try to win the mandate to lead Stripe’s initial public offering. They put, like, Fidelity. Fidelity will buy more shares than your dentist.

When I was an equity capital markets banker myself, the efficient way for companies to sell stock was to institutional investors:

1. The institutions have a lot of money, so you can get an IPO done by selling to a few dozen institutions rather than a few thousand dentists.
2. The banks cover the institutions and have salespeople who know them well, so if you want to do an IPO, the banks can call up the institutions and say “hey buy some of this stock,” which they can’t necessarily do with thousands of dentists.
3. The institutions are skilled at valuing companies, so the banks can call them and say “would you buy this stock at $40” and they will say things like “yes seems fair” or “that looks a little rich compared to recent comps, I could do $38,” and you can have an informative discussion about pricing. Retail investors will often get allocated some sliver of an IPO, but they are generally considered price takers: They buy the stock at the price that the institutions agree on, rather than participating in price negotiations themselves.

That wasn’t always the case: 100 years ago, there were fewer institutional investors, so investment banks’ sales forces really would go out and hand-sell IPOs to a lot of retail clients. (That’s part of why IPO syndicates traditionally included a lot of banks: They all had different retail clients, and you needed all of them.) But when I was an ECM banker, there was a many-decades-long trend of increasing institutionalization, and I never thought much about retail.

Since then, uh, that trend has reversed? Not entirely. But with the rise of Robinhood and meme stocks, retail investors are more active than they used to be, and we have all become accustomed to the fact that retail investors sometimes do set the price of big stocks. And that is particularly true in initial public offerings: Partly for supply-constraint reasons that we discussed recently, many IPOs get done at a relatively low institutional price and then pop to a much higher retail price when they open for trading.

And so now companies that are doing IPOs have to consider retail. For one thing, there’s the pop: If institutional investors would buy your stock at $40 but retail would buy it at $80, you might prefer to sell it at $80, because that’s more. [2] For another thing, retail investors make up an increasingly important part of the investor base, and when you go public you have to figure out how to cater to them. If you want to raise money later at meme-stock prices, or if you need to get shareholder votes on things, you will need to have some sort of retail investor relations strategy. Might as well start it early, by making retail investors feel included in the IPO.

Bloomberg’s Bailey Lipschultz and Anthony Hughes report:

Retail traders, long considered dumb money by Wall Street, have changed investment dynamics in everything from individual stocks to crypto to one-day options. Now they’re throwing their weight around in the IPO market — and companies are welcoming them with open arms.

Take Bullish, the crypto firm that went public last month in a supersized $1.1 billion debut. The company gave retail investors direct access to the initial public offering — a privilege usually reserved for early investors, institutions or wealthy customers of the Street’s biggest banks — via online brokerages like SoFi and Robinhood. And demand was so sharp from those venues, according to people familiar with the deal, that Bullish was able to price the offering at $37 per share, up nearly 20% from the top end of the range it first proposed.

Even that wasn’t high enough, as the stock popped 143% from the IPO price in its opening trade, delivering a paper windfall to a group that’s traditionally been shut out of market debuts.

The Bullish example showed Wall Street and the private companies looking to enter public markets that retail traders, who make up more than 20% of all US equity trading and weigh heavily on newfangled markets like crypto, can bring enough demand to change the dynamics of an IPO pricing. The surge in retail participation at online brokerages also means bankers don’t have to exclusively rely on pre-existing relationships with clients — they can offer IPO shares to virtually anyone, broadening the demand pool.

Yes look I will say that “Wall Street considers retail dumb money” and “Wall Street wants to sell to retail” are not precisely opposite statements. Similarly:

Wall Street has long viewed retail buyers as price insensitive, essentially deeming them reliable buyers of IPOs in hopes of getting in on any initial pop. As a result, mom and pop traders often bought high and watched as IPO participants offloaded shares at a profit, leaving them with steep losses.

Now private companies see retail as less of a mark and more as a reliable partner worthy of reward during the IPO marketing. The desire to sell to them at the IPO can provide a sense of loyalty, while other deals may tap individual investors given the steady trend of retail trading in the market.

“Less of a mark and more as a reliable partner,” yes. Anyway I guess my question here is: How committed are the ECM bankers to courting retail? It is an entirely new skill set; pitching IPOs to institutional clients (by buying them dinners, talking about valuation) and pitching IPOs to self-directed retail clients (by … being on Reddit a lot?) are very different processes. If you are pitching for an IPO now, do you have to include your Reddit username on the team page? Do you have to talk about your ability to generate retail enthusiasm? If IPOs are becoming more of a direct-to-consumer business, shouldn’t the approach of capital markets bankers change?

Conversely. One thing that I think about a lot is that, in the US, the pool of “accredited investors” (people who are legally allowed to buy private-company stocks) is roughly the same size as the pool of people who actually invest in individual stocks. (They’re both on the order of 20% of the population.) Those pools do not perfectly overlap — lots of accredited investors don’t buy single stocks, and lots of Robinhood traders are not accredited — but it can be clarifying to think of them as highly overlapping. The audience for “stocks” is very close to the audience for “private company stocks.” 

In practice, though, most accredited investors don’t actually have much ability to buy stocks in hot private companies, as we often discuss. Those companies, for various reasons, don’t actually want to raise money from the mass of retail-ish accredited investors. They want to have a relatively small shareholder base, and to keep control over it. They want to be able to restrict stock sales by employees, and to prevent stock from falling into the hands of activists. They like not having a fluctuating stock price. And they don’t want to have a lot of responsibility to thousands of retail-ish investors. Generally speaking there is a pretty sharp divide between public companies (in which anyone can invest) and most private companies (where the shareholders are mostly just employees and big institutions). And when a private company decides it wants a lot of retail-ish investors, it will go public, so it can sell its stock to all of the retail investors on the stock exchange.

But in principle there could be a huge middle ground. In principle you could imagine a private-company exchange where:

1. Companies could sign up to allow their stock to trade on the exchange, though they wouldn’t have to.
2. Investors could sign up to trade stock on the exchange, but they would have to be institutions or individual accredited investors.
3. The companies would not be subject to the disclosure obligations that US securities law imposes on public companies, because they would not be public companies. [3] They’d be private companies with lots of dentists as shareholders.
4. The exchange could, if it wanted, have listing standards. It could impose its own disclosure requirements, requiring that companies, say, disclose annual financial statements to investors on the platform. These would not have to be the same rules that apply to US public companies. But it would be good customer service for the investors, and might improve liquidity, if the investors had some disclosure.
5. The exchange could, if it wanted, include various company-friendly rules that don’t exist in public markets. It could ban short selling. It could impose ownership limits, or let companies blacklist certain investors, or otherwise make activism hard. It could … require that all trades occur at a price equal to or higher than the previous trade? Those rules would be bad for liquidity, but that might be a tradeoff that the companies want.

Companies would sign up for this if (1) they wanted to access more investors, to increase liquidity and/or raise money and (2) they didn’t mind the downsides (more disclosure, less control over the shareholder base) that come with being a little more public. But not public public.

There are private-company exchanges sort of like this, though my sense is that their traction is somewhat limited and SpaceX and Stripe are not actually clamoring to get their shares listed for trading by accredited dentists. (We talked recently about Forge and EquityZen, two such platforms, which display prices for some of the big hot private companies but don’t always trade them.) I think that empirically the demand from companies for “let us sell stock to retail-ish investors without being fully public” is somewhat limited. (The demand from alternative asset managers to do it is absolutely insatiable.) But obviously some companies want that. And Robinhood is enthusiastically trying to “tokenize” the stocks of big private companies so it can sell them to retail. 

If you started a stock exchange where the pitch to companies was (1) you don’t have to go public, (2) we’ll let you sell to retail-ish accredited investors, a pool that overlaps quite a bit with the pool of retail stock investors, (3) our disclosure requirements will be the same as those that the US Securities and Exchange Commission imposes on public companies except (4) we’ll only require semiannual financials instead of quarterly financials, would that get much traction? Is semiannual financial reporting a big upgrade over the current system? I don’t know. Anyway:

The Long-Term Stock Exchange plans to petition the Securities and Exchange Commission to eliminate the quarterly earnings report requirement and instead give companies the option to share results twice a year, the group told The Wall Street Journal. 

It says the idea would save companies millions of dollars and allow executives to focus on long-term goals instead of worrying about hitting quarterly targets or prepping for earnings calls.

“We hear a lot about how it’s overly burdensome to be a public company,” said Bill Harts, the exchange’s chief executive officer. “This is an idea whose time has come.”

President Trump briefly explored the idea during his first term, and current SEC leadership has signaled an interest in reducing regulation. LTSE representatives recently discussed their proposal with SEC officials and left the meeting encouraged, people familiar with the matter said.

LTSE is a stock-trading venue for companies focused on long-term goals. Its proposal would apply to all U.S. public companies, not just the few listed on its exchange.

Sure, right, the sensible approach is probably to tinker with the public-company regulations, because being a “public company” is a convenient standardized choice. Most big companies want to be public (though that’s not as true as it used to be), public stock exchanges are way more liquid than private exchanges, and it’s just convenient to have standardized public-company rules and try to optimize those rules. But in principle, if you don’t like the public-company rules, you could write some rules of your own and try to get private companies to sign up for them. Most stock invesotrs could buy private-company stock; you just have to sell it to them.

Anglo American Agrees to Buy Teck in Deal Reshaping Mining. Staffing Crisis Unfolds at BLS With a Third of Leadership Jobs Now Vacant. PNC to Acquire Colorado-Based