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Money Stuff: ESG Accounting Requires Accountants

by
Matt Levine
Money Stuff
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ESG Statements

  • People typically look at financial statements and growth prospects when determining whether or not to invest in a stock.
  • ESG (environment, social, and governance factors) investing is becoming more and more popular and needs its own "ESG Statements."
  • Issues with ESG statements:
    • Companies may lie about how much they pollute.
    • They may use their own form of ESG accounting to make their impact look good.
  • This creates an opportunity for the Big 4 Firms, which could see their workload double as they try to set the rules for ESG accounting.

Tickers

  • There should be a market for stock tickers where companies can buy the stock ticker from another company so to make their ticker more relevant to their company's purpose.
  • The ticker, MEME, is one of the most sought out due to the recent activity of retail investors, and Roundhill Investments, Hershey's firm, is the owner of it.
  • Roundhill already owns $420 billion in assets and proposed an expense ratio of 69 basis points. This was done to emphasize the "meme-y-ness of the stock," which attracts retail investors.

Elsewhere in meme-stock investing

  • In a WSJ article about meme stock investing, retail investors urge others not to "pay for [investment advice] you can get for free online."
  • While it may seem like these online "investment advisors" aren't trying to sell you anything, they are actually trying to attract you to their content, which increases their popularity.

Gamification: Is it bad the Robinhood is fun?

  • The SEC is requesting information on matters related to the use of digital engagement practices by broker-dealers.
  • While the backlash is not wrong, there is nothing Robinhood can do to address the fact that their users are having fun trading because their platform is built on being user-friendly.

Are SPACs investment companies?

  • 2 law professors filed a lawsuit stating that SPACs are investment companies and are therefore operating illegally.
  • Many law firms disagree, saying SPACs have a completely different purpose from investment companies.
  • If SPACs were investment companies, the SEC surely would have noticed by now and made rules to address it.
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