Aug. 01, 2021
Dear SEC, I'm not surprised that this new rule is moving forward. But I'm also negatively impacted by it as it's one of the few remaining places in the equity markets to purchase a deal if you're willing to do the additional legwork and bypass the highly optimistic valuations that are seen as fair and normal. I've been a value investor for over 2 decades and have slowly moved into this less active part of the market during the last few years. It's an interesting, challenging, and profitable niche when done prudently. As a small individual investor, it's a lucrative place to not have to overpay for companies. I understand that less experienced investors should steer clear, but dismantling a functioning market has implications for many small and large investors. We may not have the numbers of the mobs of emotional, loud, and weepy people or ones with large social media followings that tend to get heard, but we are a minority that's not being factored into the blunt solution. The stock market is a wealth-creating mechanism in many different areas and to me, it doesn't make much sense to remove potential investments that have the potential for gains and losses when there's a willing market and participants that are mostly well-intentioned because of a very small proportion of fraudulent activity. Does it make sense to allow people to freely buy and sell highly overvalued companies (or even real estate) that have a high probability of going down in price, and taking people's net worth down with it? It seems silly to me investing this way, but it's something that's widely practiced, and even congratulated while times are good and losses haven't been sustained yet. But since it's a free market we mostly agree that it's acceptable, since people have the OPTION to not play in that market. The same OPTION should be extended to the less liquid market (that actually holds numerous opportunities to purchase assets at highly undervalued prices). It's a tiny corner of the market that should be accessible to small investors with big aspirations. It's very similar to how Warren Buffett began to amass his wealth by uncovering value by digging deeper than others were willing to. Since we have more advanced technology and widely available information being able to search to uncover opportunities has improved, which has led to a group of rational and intelligent investors to dig a little deeper than the rest in less liquid stocks. To take away that opportunity and eventually require investors to be accredited to deal in these securities will lead to a Catch-22 situation where fewer investors will have an opportunity of being accredited investors without taking on excessive risks. The unintended consequences will probably cause more harm than the intended benefits. I am for well-functioning markets that are safe, and because of that if someone that's not a professional investor or accredited should still have a way to access the prices and trading of these less liquid stocks without excessive costs by requiring something like a waiver or some other simple solution that doesn't involve just "taking the ball away", which is essentially what's in the works and creating further barriers to high-probability wealth creation. The rise in new investors over the last few years is important and exciting, but the system shouldn't bend to protect the newest entrants to the market or vocal mobs at the expense of investors like me (and a small sample of some of the others that will be harmed https://twitter.com/DarkfireCapital/status/1418675297474400258) that have the wherewithal to navigate the less liquid markets without having an alternative solution planned and in the works that take into account the people that hold and trade these companies, not people that are unfamiliar with these markets. Regardless of what the final rule and implementation look like I'm confident a creative solution will be found that will eventually allow access to these "dark" stocks to people that are not accredited investors. ' Thanks, Tim Livian