Can't see why they shouldn't be allowed to raise funds by selling stock. People are free to buy or not to buy, at their discretion. Govt/courts shouldn't be picking winners and they shouldn't be picking losers either.
There are plenty of stocks you can by over-the-counter "freely".
Stock exchanges are regulated marketplaces. Regulated marketplaces have existed since the dawn of the civilization because they are valuable for buyers and sellers. City marketplace in a had different rules than trading outside it.
Companies go there and voluntarily submit to strict rules and regulations to get access to more investors. Investors wan to invest in regulated markets because regulators work for them.
> Investors wan to invest in regulated markets because regulators work for them.
no, that's not true. Regulators ensure transparency and correctness of information. It works to everybody's advantage, not just investors.
Investors are free to choose bad investments, provided that the investments are made with full and transparent information. Regulators aren't supposed to be there to "protect" investors from making bad choices (what is a bad choice? Who gets to decide that?).
I don't see you complaining about, for example, brokerages, dealers and exchanges providing liquidity by fulfilling your orders even though the market won't at a given point in time. This can prevent a security from falling or rising in value where it otherwise would have, and directly works against an investor who was hoping for a rise/fall in price.
Regulators don't work "for investors", they work for lobbyists, they want to keep the markets running, and for any given policy, someone will win and someone will lose.
I don't see how the Hertz decision is any different, except I do see how taking the opposite position can hurt the markets, either by creating a chilling effect on low-mktcap companies listing or by creating uncertainty in the legal environment, which investors really don't like.
Just look at the number of Israeli companies who won't list in their home turf, TASE, or companies who have and pulled out. A lot of it has to do with TASE imposing unreasonable requirements. Otherwise raising money domestically would be a no-brainer.
I’m an investor on the other side who is just minding my own business buying market indices and then all of the sudden, less-than-ethical actors show up and bid up the price. Now I am being effectively taxed by buying portions of a soon-to-be-worthless company. Who/what are we going to optimize this situation for?
In this case the NYSE jumped on delisting hertz stock to prevent this kind of stuff from happening. But courts and government have to step in constantly, and a tooooon of law created, because we live in an incredibly complex system and it’s almost never clear cut how to optimize for greatest freedom/happiness.
If you're buying indices then you have explicitly given up control of a portion of your portfolio to them, and they can lose money as well as gain. Sounds to me like you're just complaining because you lost money because of this move, but symmetrically speaking, you could have gained.
And to be clear, I'm not long or short Hertz and have never been (unless some index or fund I'm holding happened to buy their stock).
Hertz lawyer, for one. And I will lose some nominal amount, or maybe I made money, depends on when the index rebalances. But NYSE racing to delist in the face of this move and Hertz own lawyers comments are enough that no, in objective reality, there’s many reasons why this isn’t just some simple issue.
In this case, I think they should be able to sell stock as well. But I think there is a point where selling a security you know to be worthless amounts to fraud.
