Tags: Aequitas Innovations, Canada, Jos Schmitt, stock exchanges
Nostalgia can be a surprisingly powerful force in marketing financial products, and without knowing much about it I have high hopes for this new Canadian stock exchange? It’s like a regular stock exchange (in Canada), only they won’t allow high-frequency trading. I mean, they will allow it, but not the bad kind:
Aequitas plans to challenge “certain predatory high frequency trading strategies which have impacted the quality of existing equity markets,” Greg Mills, chairman of Aequitas and co-head, global equities at Royal Bank’s asset management unit, said in a statement. “Marketplaces in Canada and around the globe are increasingly out of sync with their traditional users as they attract and cater to volume and revenue-generating trading over traditional investors.”
You can read their position paper here if that’s your thing. It seems very worthwhile and Canadian, with an interesting mix of old-timey things (market makers would have performance obligations for their securities of responsibility) and concessions to current high-speed trading realities, but with a general emphasis on being a market for Investors and Issuers as opposed to Speculative Jerks.
I feel like that will go well? Read more »
Tags: bringing benefits of hedge funds to the masses, Canada, CASH+ Breakfast Notes, initial private offerings, IPOs, Jeffrey O'Brien, One Financial Corporation
So here’s a story about a Canadian asset manager and I don’t know what to do with it so I’m pretty much just going to tell you the story, and at the end there’ll be a quiz, and the choices on the quiz will be like:
- Is there something a little weird about this company? or
- Is this just, like, how things are done in Canada? or
I don’t know the answer but maybe you do? Mostly I just love the story so you ought to hear it and then you can decide.
The company is called One Financial Corp. and it markets mutual funds in the “All-Weather Profit Family.” These are advertised as “Canada’s first and only family of long/short mutual funds and wrap portfolios,” designed to “bring benefits of hedge funds to the masses” by being long-short and trading derivatives and stuff.1
One thing to know about One Financial is that it fired 70% of its workforce over the weekend and Jeffrey O’Brien, the CEO and founder, “said he was threatened” by some of them. Also he’s looking to hire some salespeople who don’t suck like the old ones did.2 Also there’s some debate as to whether those fired people were fired (a) last Friday or (b) on Monday when they showed up and the doors were locked.3
All bad signs! But that’s not the story, that’s just like some stuff that happened. The amazing story is that, in parallel with firing all its staff, this company is doing an IP’O, which is like an IPO only the P’ stands for “private” rather than “public,” because this is an initial private offering, and it is a pile of amazing. To me. Maybe not to you? Maybe you see this sort of stuff all the time?
Here are some things I enjoyed about One Financial’s initial private offering: Read more »
Tags: Bank of Canada, Canada, cover ups, maple syrup
The smell of success is particularly sweet in Canada as an unending stream of residents swear that the new $100 bill is the scent of maple syrup. The national treasury released a new plastic bank note in November 2011, and they have received hundreds of emails from residents who are convinced that the bills have an added fragrance. ‘They all have a scent which I’d say smells like maple? Please advise if this is normal?’ wrote one concerned citizen. Media liaisons for the Bank of Canada have repeatedly denied that there is any particular scent to the money, but that didn’t stop concerned citizens. The Canadian Press submitted a request for all of the emails the bank received from the public in regards to the issue, and there are enough to fill a maple syrup vat. ‘I would like to know…once and for all if these bills are in fact scented, as I do detect a hint of maple when smelling the bill,’ another such email read. While some of the emails were focused on the question of whether or not they were scented, others were more concerned that their notes were defective since they had lost ‘the scent’. ‘The note…lost its maple smell. I strongly suggest the Bank increases the strength of the… maple smell,’ one person wrote. [DM]
Tags: activism, Bill Ackman, boring Friday afternoon legal stuff, Canada, Canadian Pacific, Carl Icahn, David Einhorn, Hedge Funds, iPrefs
If you’re an activist investor your job is to (1) think of an idea for how to make a company’s stock go up, (2) buy stock in the company, (3) convince them to do your idea, and (4) sell high. Step 3 tends to involve lots of attention-seeking – it’s easier to wear a company down into doing your idea if they’re constantly hearing about it from other shareholders and reporters and stuff – but steps 1 and 2, importantly, don’t.1 If you tell everyone about your great idea for Apple to issue GO-UPS,2 then they’ll all realize that Apple will certainly do it and unlock tens of billions of dollars of value, so they’ll bid up the stock before you can buy it and you’ll lose the opportunity to benefit from all those gains. That may be a bad example but just work with me here.
There’s another way of putting that, which is: if you secretly conceive of an idea to make Apple a better company, and then secretly buy up a bunch of Apple stock, and then announce to the world “surprise! I have 12% of Apple’s stock, and a brilliant idea that starts with a thematically appropriate lowercase i!,” and the stock goes up, and you make a lot of money – isn’t that unfair? You got to buy stock at the low, pre-publication-of-your-idea price; the people who sold to you were bamboozled into selling out too low because they didn’t know about your great idea. It almost “smacks of insider trading.”
Or something. I may not be doing this theory justice because I think it’s silly: that great idea is your idea; why shouldn’t you be able to make money off of it? (And why should anyone else?) The money is your incentive to come up with the idea in the first place, and do the hard ego-stroking work of pitching it to CNBC and the target company; if you had to share it with free-riders why would you take on the responsibility? We talked about this a little last year when there were vague rumors that the SEC was buying into it, and that they might require investors to disclose 5% stakes within 1 day of acquiring them (instead of the current 10 days), and include synthetic share ownership in computing the 5%, in order to make it harder for activists to secretly accumulate shares. I have not heard much about that proposal since, though I hesitate to assign any causality.
But last week in another, colder part of town, someone proposed the same thing. Canada, I mean. Canadian securities regulators proposed: Read more »
Tags: Canada, so we've got that going for us
Today is not a great day for the American government, people, economy and reputation. But that doesn’t mean a good dose of schadenfreude can’t lift the gloom some. Read more »
Tags: Canada, Charles Evans, unemployment
Well, this is not especially encouraging: Read more »
Tags: Canada, Peter Beck, punishments
So here’s a little story about a man named Peter Beck. Once upon a time, he ran a day-trading operation with 5,000 traders in places like China, Nicaragua, Romania and, worst of all, Canada. And he used that network to manipulate markets, regulators say; at the very least, he knew his charges in 30 countries were doing so, it is alleged. Read more »