Here’s a stylized history of US public stock markets. In the olden days, anyone could raise money for a project by selling stock to the public, and lots of people did, often by making false promises. This crested in the 1920s, as people rushed to buy stocks and borrow money to juice their speculative bets. Then there was a crash and a Great Depression. To restore confidence in markets, Congress passed some laws — particularly the Securities Act of 1933 and the Exchange Act of 1934 — to regulate public stock markets. From now on, a company that wanted to sell stock to the general public had to explain its business and publish audited financial statements and disclose important events, so that public investors would know what was going on.

Of course, this only applied to public companies, and there were exceptions for companies that did not raise money from the general public. If your father-in-law gave you some seed money to open a local hardware store, obviously the federal government did not require you to give him audited financial statements. Over time, these exceptions grew in importance. In the 1920s, the best way to raise a lot of money for a business was to sell your stock broadly, on the stock exchange, to thousands of individual investors who wanted to buy it. In the 2020s, the best way to raise a lot of money for a business is often to call up one guy, Masayoshi Son at SoftBank Group Corp., and ask him for $10 billion. He will probably say yes, and then you will have $10 billion, and you won’t need to sell stock to the general public or file financial statements or anything like that.

“Private markets are the new public markets,” I often say around here. The main benefit of going public used to be that it allowed you to raise a lot of capital, because public markets were where most of the money was. Now trillions of dollars are available in private markets, so it is less important to go public. And big exciting tech companies — SpaceX and OpenAI and Stripe — can raise billions of dollars at 12-figure valuations without ever selling stock to the general public. 

And they often do, because going public is kind of a pain. You have to disclose your financial statements! You have to publish updates on your business, and if those updates are wrong someone will probably sue you. (“Everything is securities fraud,” I also often say around here.) Also, if you are public, anyone can buy your stock, so you might end up with shareholders you don’t like. And your stock will trade publicly, which means that sometimes it will go down, which might annoy you. 

This is honestly all very convenient for big hot private tech companies: They can raise all the money they want, without the expense and distraction and annoyance of going public. [1] It’s a good deal! They are in no hurry to go public.

It is arguably less of a good deal for the general public. Those big hot private tech companies are hot, individual investors want to buy them, but they can’t. We talk all the time about the lengths people go to to buy shares of SpaceX and other hot private tech companies, and how hard it is, and how much they overpay.

And so it has been fashionable for the last decade or so to say something along the lines of: “Much of modern economic growth occurs in private companies, many of the most exciting companies are private, it is bad that ordinary individual investors cannot get access to those good investments, and we should fix that.”

How can you fix that? What I hope I have argued above is that it is hard. Many big private companies don’t particularly want to be public, because they find public markets distracting and annoying and expensive. The main reason, I think, that “private markets are the new public markets” is that there is a lot of money in private markets, because huge global pools of investable capital are concentrated in the hands of private equity firms and venture capital firms and endowments and family offices and Masayoshi Son; nobody needs thousands of retail investors to fund their businesses. (Or, rather, SpaceX doesn’t need them; maybe some private companies need thousands of retail investors, but maybe those aren’t the good ones.)

Still, people want to try. Here are, conceptually, some ways to fix the problem:

1. Make it easier to go public. Cut down on costly disclosure regulation. Make it harder for shareholders to sue companies, and for activists to win proxy fights, and for short sellers to criticize companies. Obviously there are trade-offs here, but maybe they are worth it. If being public is no more annoying or expensive than being private, maybe SpaceX and Stripe and OpenAI will shrug and say “sure, flip the switch.” Historically this is the standard thing that people say when they talk about fixing the problem. 
2. Make it harder to be private. Increase costly disclosure regulation of private companies. Pass a law saying “if you have more than $X of revenues, you have to publish audited financial statements, and if anyone finds an error in them, they can sue you.” You see occasional efforts in this direction; in 2022, the US Securities and Exchange Commission began “work on a plan to require more private companies to routinely disclose information about their finances and operations.” 
3. Restructure the economy and distribution of wealth such that there are fewer large pools of institutional capital, and the only way to access a lot of capital is by selling stock to the general public. This one seems hard.

There is, however, a more extreme approach: Just get rid of the public-company rules. Let anyone sell stock to the general public without any disclosure or audited financial statements. The general public can make up its own mind: If someone wants to sell you stock, and you want to buy it, you can buy it. If you want audited financial statements, you can ask for them; if the company says no, then you don’t have to buy the stock. (But you can!) Fraud would still be illegal — if they give you fake financial statements, you could sue, or call the police — but the whole apparatus of required disclosures would become optional. Companies could follow the current US securities laws, filing audited financial statements and annual reports and public updates, if they thought that would help them raise more money at a higher valuation. But if they didn’t want to, they wouldn’t have to, and they could still sell stock to anyone who wanted to buy.

You do not hear a lot of people explicitly advocating for this approach. There is a widespread sense that, on balance, the last 100 years of US securities regulation has been good. Our capital markets are deeper and more liquid, our valuations are higher, we get less fraud, because big public companies have to disclose stuff about their businesses. 

And yet. We talk from time to time about an essential discovery of the cryptocurrency industry, which was that you could raise money for a business idea by selling quasi-shares of the economic growth of that business — “tokens” — without complying with securities law. That theory has had mixed results, though these days it seems to be on the ascendant.

Most big businesses still sell stock, though, not tokens. But the token approach suggests a way forward. Take private company stock, call it a token, and then sell it to the general public. “Tokenized stock,” you call it. You put it on a blockchain. “Just because you mumble the word ‘blockchain’ doesn't make otherwise illegal things legal,” I wrote in 2015, when that seemed true, but as I wrote this week, that is no longer obvious.

There are other reasons to “tokenize stock”: Stock that exists on a blockchain, rather than in the traditional registry of securities ownership, might have some convenient technical properties. On Bloomberg’s Odd Lots podcast this week, Robinhood Markets Inc. Chief Executive Officer Vlad Tenev talks about some of them. You could have custody of your own stock, rather than keeping it at a brokerage; you could probably get a big margin loan from a decentralized finance platform; it might be easier to trade 24 hours a day.

But, as I have written before, these are minor distractions from the real prize. The real prize is that if you utter the magic word “tokenized,” that could let you sell private stock to the general public. It could let companies sell stock to the general public without complying with US disclosure rules. That is what it means. It means that the US securities laws that were put in place in the 1930s, that require companies to make public disclosures about their businesses to raise money from the general public, will no longer apply. 

To be clear, we are not there yet. But that is the goal. This week Robinhood announced that it will offer tokenized stocks, though initially (1) not to US customers and (2) mostly for US public companies:

Robinhood Markets Inc. is joining the growing push to trade US equities on the blockchain, making tokenized US securities available to 150,000 customers in 30 countries, 24 hours a day, five days a week.

Here is a bit more detail on the structure. (Note that “The underlying assets are held securely by a US-licensed institution”: In theory, as we have discussed, tokenization could be a way to sell naked derivatives on stocks, but Robinhood’s tokens are fully collateralized.)

But as part of its tokenization event, Robinhood also gave away some promotional tokens for private stocks:

To mark the launch, Robinhood is giving 5 euros worth of OpenAI and SpaceX tokens to every eligible user in the European Union who onboards to trade stock tokens by July 7. The company has allocated $1 million worth of OpenAI and $500,000 worth of SpaceX for the campaign. ...

“We wanted to make sure we were giving access,” said Johann Kerbrat, senior vice president and general manager of crypto at Robinhood. “What we discussed on stage was how to address the inequality between people who have historically had access to these kinds of companies and everyone else. That’s the really exciting part: Now everyone will be able to get it.”

Again, just in Europe so far, but you can see that the goal is to offer OpenAI and SpaceX shares to the general public without complying with normal disclosure rules. OpenAI and SpaceX would “go public,” in the sense that anyone could buy their shares in a brokerage app, without actually “going public,” in the sense of publishing a prospectus with information about their business and financial statements.

Tenev is quite explicit about this on Odd Lots, saying [2] :

I think with private companies ... it’s hard to imagine an argument for why retail should not have access to that, an argument that on its face isn’t illogical. You have access to so many things. You can just spend your money on Amazon and buy all sorts of trinkets that immediately lose value and depreciate. You can buy meme coins. So the idea that those classes of ways to spend your money are okay, but buying OpenAI or SpaceX stock, I think on its face, it’s illogical.

This is not wrong! The general public can buy all sorts of speculative things in the public markets (zero-day options!), or the crypto markets (memecoins), or sports betting (Robinhood briefly offered Super Bowl bets!). Compared with that stuff, big exciting private companies like SpaceX or OpenAI do seem like better risk/reward propositions. It is simply, undoubtedly true that the historic public-versus-private distinction does not map onto any sort of coherent good-versus-bad or risky-versus-safe distinction. There is incredibly dumb risky stuff that is widely available to retail investors, and there are safe blue-chip investments that are not.

I just want to be clear about what he is saying, about what is happening. “The general public should be able to buy shares of private companies” is an oxymoron. What makes a company “private” is that (1) it is not available to the general public and (2) it is not required to follow US public-company disclosure rules. Therefore, “the general public should be able to buy shares of private companies” means “companies should be allowed to sell stock to the general public without following disclosure rules.” That is not a crazy thing to think: Maybe you think the disclosure rules are outdated and expensive, that they deter innovation and capital formation, that they cannot be reformed and so we should just get rid of them entirely. But that is what we are doing here.

Tenev is not an outlier. Larry Fink of BlackRock Inc. has also advocated for tokenization, and he is also pretty explicit that what he means is selling securities to the general public without public-company disclosure. In his annual letter this year, he writes:

Tokenization makes investing much more democratic. ... Some investments produce much higher returns than others, but only big investors can get into them. One reason? Friction. Legal, operational, bureaucratic. Tokenization strips that away, allowing more people access to potentially higher returns.

The “legal friction” is that some companies are private because they do not want to comply with securities disclosure rules, and tokenization’s solution is that they can sell stock to the public without complying with those rules.

Again, this solution doesn’t work, yet, in the US. You can’t just sell “tokens” of private-company stocks (or private credit loans, or private equity funds, etc.) to the general public, in the US, without disclosure, yet. [3] But a lot of big players in finance are advocating for it, the regulatory environment seems pretty receptive, and you can understand why. The general public wants to buy private investments, intermediaries want to sell them, and the disclosure rules stand in the way. Saying “we should get rid of the disclosure rules” sounds bad, retrograde, greedy. Saying “tokenization” sounds good, modern, cool.

One more bit of stylized history. In the 2020s, a lot of crypto projects raised a lot of money from the general public, often by making false promises. People rushed to buy crypto, and borrowed money to juice their speculative bets. Then there was a crash and a “crypto winter.” You could, in late 2022, have imagined various possible futures. You could have imagined a permanent crypto winter: Burned by the crash, people might just lose interest in crypto. Or you could have imagined something like what happened to stocks in the 1930s: Burned by the crash, Congress might have made new rules to restore confidence in crypto markets, to require disclosure and regulate conflicts of interest and impose capital requirements. (And we have seen some of that; the Genius Act imposes capital requirements on stablecoins.)

But I personally would not have predicted this future. Instead of regulators imposing disclosure and trading rules to make crypto more like the stock market, the financial industry seems to be finding a way to get rid of disclosure and trading rules in the stock market, to make the stock market more like crypto. 

Elsewhere in BlackRock and private markets, Bloomberg’s Silla Brush and Sridhar Natarajan have a story about how BlackRock is integrating HPS Investment Partners, the private credit firm it recently acquired. One way to understand BlackRock’s deal for HPS is as a matter of shareholder value. BlackRock is a huge asset manager, most of its assets are in public markets, “public market assets” in 2025 means largely indexed assets, and so the fees are on the order of a few basis points. HPS is a much smaller asset manager, its assets are mostly in private markets, and the fees are on the order of 1%. So private asset managers should be worth an order of magnitude more, as a percentage of assets under management, than public asset managers. And if you blend the two together, maybe you get a sort of multiple arbitrage. Maybe investors start thinking of BlackRock as “that company that does private credit,” instead of “that company that does index funds,” so it starts to trade at a private-manager valuation rather than a public-manager one. 

But another way to understand the deal is that big financial services firms are socialist collectives run for the benefit of their employees, and private-credit investors get paid more than public-market investors, so injecting some privates into the business could raise everyone’s pay. Brush and Natarajan report:

With HPS, Fink has acquired not only a private-credit powerhouse but also a handful of executives who are richer than just about anyone else at BlackRock, including him. Kapnick, for instance, is arriving with a personal net worth of $4.3 billion, according to the Bloomberg Billionaires Index. Fink, the company’s ultimate key man and a giant in the industry, is worth less than half that.

Fink’s board has said that BlackRock would bring executive compensation in line with how the likes of Apollo and KKR pay their bosses. For the first time, Fink himself will be granted carry.

HPS has typically allowed its investing teams to earn the vast majority of the incentive pay from their funds. BlackRock’s portfolio managers in similar roles have been accustomed to getting half or less.

“If you’re the smartest person in the room, you’re in the wrong room” is one classic bit of self-improvement advice, but also, if you’re the highest-paid person at your company, you might be at the wrong company. Even if you’re the CEO. If you want to get paid like a private-credit executive, you’d better get a private-credit business.

Meanwhile, here is a Wall Street Journal article titled “Why Vanguard, Champion of Low-Fee Investing, Joined the ‘Private Markets’ Craze,” and I bet you can guess the answer! The answer is that low-fee investing pays low fees, while private-markets investing pays high fees:

Wall Street is feverishly embracing private markets and Vanguard, like other giant money managers, wants a foothold in this booming business. A new fund it is developing with Blackstone and Wellington Management will offer a mix of public and private assets. ...

The companies say they want to democratize investing, letting people place bets in areas such as private equity and private credit that have long been restricted to pensions, endowments and plugged-in elites. With fewer publicly traded companies to invest in, people need to put money in private markets, they say.

But the investment firms have something to gain for themselves in this shift. After years of driving down fees, retail fund managers are nearing a wall as what they charge approaches zero. The chance to sell more funds that can charge higher fees would boost revenues for the likes of Vanguard and State Street, which pioneered exchange-traded funds.

Vanguard has a mutual ownership structure, in which its management company is owned by its funds, so it has fewer incentives to charge high fees than its competitors do: Other companies want to maximize shareholder value by charging high fees to fund customers, while Vanguard essentially pays those fees out to the fund customers anyway. Still, if you run a giant asset manager, you will at least be curious about the most lucrative bits of asset management. Plus, not all of the fees go back to the customers; see the previous section. 

I mean? 

Paramount said late Tuesday that it has agreed to pay President Trump $16 million to settle his lawsuit over the editing of an interview on the CBS News program “60 Minutes,” an extraordinary concession to a sitting president by a major media organization. …

The prospect of being accused of bribery, and perhaps facing legal action because of it, had vexed Paramount’s directors, who had to weigh the corporate benefits of a settlement against the perception that they were greenlighting a deal to secure an unrelated merger.

Freedom of the Press Foundation, a First Amendment group, has said it planned to file a lawsuit on behalf of shareholders against Ms. Redstone and the Paramount board in the event of a settlement; the group has retained the prominent litigator Abbe Lowell for its effort.

The situation here is (1) it is widely agreed that Trump’s lawsuit is frivolous, (2) Paramount has a deal to sell itself to Skydance and would like that deal to close, (3) it needs regulatory approval from Trump’s Federal Communications Commission to close the deal, (4) uh, you know. “Paramount emphasized in its statement that the lawsuit was ‘completely separate from, and unrelated to, the Skydance transaction and the FCC approval process.’”

Anyway. Presumably it is good for shareholders if the deal closes, and so the shareholders want Paramount to do whatever it takes to get the deal closed, even if that means doing a completely separate and unrelated settlement. [4] Lots of other people — people who care about the rule of law or freedom of the press — might object to this settlement, but it is strange to think that the victims here are Paramount shareholders. 

But, of course, the point is that