Investor Skepticism v. Investor Confidence: Why the New Research Analyst Reforms Will Harm Investors

Part I of this Article provides an overview of research analysts and their basic functions, including a discussion of sell-side analysts\u27 role in the market\u27s recent boom and bust. Part II examines the conflicts of interest that have plagued sell-side research, and Part III reviews the Regulatory Actions that are meant to address these conflicts. In Part IV, the author will make the case for encouraging, rather than lessening, investor skepticism in sell-side research and will explain why the Regulatory Actions are not likely to improve the performance of sell-side analysts. Finally, Part V will offer a simpler proposal to address the sell-side analyst issue. While there may not be a solution to the maybe not problem, the information gap between institutional investors and retail investors regarding the weaknesses of sell-side research can be eliminated, which would allow retail investors to benefit from the value of sell-side research while also granting them the opportunity to properly protect themselves from its weaknesses. Akin to the Surgeon General\u27s warning for cigarette manufacturers, this Article proposes that sell-side analysts and their firms be required to prominently include, with all research, a short and clear warning from the United States Securities and Exchange Commission ( SEC ), regarding the historical weaknesses of sell-side research

Using Valuation-Based Decision Making to Increase the Efficiency of China\u27s Patent Subsidy Strategies

[Excerpt] “The Chinese government has grown concerned that its patent fee subsidy programs have not funded the most deserving patents, and thus they no longer wish to spend public resources to promote low-value patents. Instead, the government would prefer subsidy programs that encourage the most deserving patents. The Patent Strategy reflects this desire, as the fourth strategic focus of the Patent Strategy recognizes the need to “[o]ptimize [China’s] patent subsidy policy and further define the orientation to enhance patent quality.”19 This Article explains how a disciplined and transparent valuation-based decision making process can help the Chinese government design patent fee subsidy programs that allocate funds more consistently to deserving patents. In addition, this Article offers the outline of a practical valuation model the Chinese government could use to filter patent fee subsidy requests.

Improving the Efficiency of the Angel Finance Market: A Proposal to Expand the Intermediary Role of Finders in the Private Capital Raising Setting

The angel finance market is of critical importance to the financing and creation of rapid-growth start-ups, whose continuous creation plays a substantial role in the success of the U.S. economy. Unfortunately, the angel finance market suffers from systematic problems, including information and agency problems and high transaction costs, that limit its ability to adequately finance these rapid-growth start-ups. One reason for the angel market\u27s inefficiency is the lack of meaningful financial intermediaries that operate in the market. One logical group that could serve a meaningful intermediary role in the angel market is finders. The current regulatory treatment of finders, however, substantially limits their ability to take on a meaningful intermediary role. While finders are currently tolerated by the existing regulatory regime, their use can raise serious problems if the finder\u27s role is deemed to be that of a “broker-dealer,” which would subject the finder to a substantial array of federal and state securities regulations. This Article examines the role of finders in the private capital setting and considers the impact of allowing them to operate under a reduced regulatory burden with the assumption that they will play a more meaningful role in private capital raising. This Article concludes that the potential benefits of an empowered class of finders for the private capital raising process outweigh the potential problems. This leads to the main proposal of this Article: rather than regulate finders who assist private companies to obtain start-up capital as a sub-category of broker-dealers, this Article proposes a new class of federally registered “finders” whose activities would be exempt from federal and state broker-dealer regulations. This tailored regulatory regime for finders in the private capital raising setting would be aimed at expanding their use based on a principle of improving the efficiency of the private capital markets. Specifically, the focus of the regulatory treatment of these finders should be to encourage their ability to reduce market problems (e.g., information and agency problems and high transaction costs) in the private capital markets, while discouraging their ability to increase existing, or create new, market problems (e.g., commit fraud). By improving the market efficiency of the private capital markets (with a particular focus on the angel market) in such a manner, this approach should improve the allocation of resources that are dedicated to creating and nurturing rapid-growth start-ups, while not exposing less sophisticated investors to undue investing dangers

Valuing Young Startups is Unavoidably Difficult: Using (and Misusing) Deferred-Equity Instruments for Seed Investing

In a well-functioning market, reasonable investors are less likely to invest in companies when they cannot confidently value the opportunity. This presents a serious problem for young startups because they are unavoidably difficult to value. Partly in response to the valuation challenge, specialized startup investors evolved how they contract for young-startup investments. Around 2005 they began using deferred-equity instruments (first convertible notes, and later safes and the KISS). Deferred-equity instruments offer a partial solution to the valuation challenge by allowing specialized startup investors to thoughtfully invest in venture capital-eligible young startups without valuing them at the time of investment. Deferred-equity instruments have become an important financing tool for the traditional startup market and have positively contributed to the United States’ seed financing explosion over the last decade. This article explains how investors value startups, why the task is unavoidably difficult, and how deferred-equity instruments contractually deal with this otherwise intractable problem. If the story ended there, deferred-equity instruments would be a resounding success. However, they spread to the Regulation Crowdfunding (“Regulation CF”) market in 2016. To assess whether deferred-equity instruments are suitable for the Regulation CF market, this article examined the Regulation CF offerings on three popular funding portals—Republic; StartEngine; and Wefunder—to get an informed picture of Regulation CF deferred-equity offerings. The examination consisted of all the Regulation CF deals funded through those three portals during 2019. The study captured 205 funded deals, of which seventy-one were safe offerings and twenty-two were convertible note offerings. This article provides a detailed look at the issuers conducting Regulation CF deferred-equity offerings and the investment contracts they employ. Based on the study, this author draws several negative conclusions about the Regulation CF deferred-equity market and generally finds these offerings result in an improper risk transfer that is likely to harm public investors. To address the problem, this article recommends that the SEC or FINRA impose a suitability duty on funding portals that host Regulation CF deferred-equity offerings

Microbial activity in the marine deep biosphere: progress and prospects

The vast marine deep biosphere consists of microbial habitats within sediment, pore waters, upper basaltic crust and the fluids that circulate throughout it. A wide range of temperature, pressure, pH, and electron donor and acceptor conditions exists—all of which can combine to affect carbon and nutrient cycling and result in gradients on spatial scales ranging from millimeters to kilometers. Diverse and mostly uncharacterized microorganisms live in these habitats, and potentially play a role in mediating global scale biogeochemical processes. Quantifying the rates at which microbial activity in the subsurface occurs is a challenging endeavor, yet developing an understanding of these rates is essential to determine the impact of subsurface life on Earth\u27s global biogeochemical cycles, and for understanding how microorganisms in these “extreme” environments survive (or even thrive). Here, we synthesize recent advances and discoveries pertaining to microbial activity in the marine deep subsurface, and we highlight topics about which there is still little understanding and suggest potential paths forward to address them. This publication is the result of a workshop held in August 2012 by the NSF-funded Center for Dark Energy Biosphere Investigations (C-DEBI) “theme team” on microbial activity (www.darkenergybiosphere.org)

2. C. W. Holzwarth

Abstract: We have investigated the feasibility of multimode polysilicon waveguides to demonstrate the suitability of polysilicon as a candidate for multilayer photonic applications. Solid Phase Crystallization (SPC) with a maximum temperature of 1000°C is used to create polysilicon on thermally grown SiO 2 . We then measure the propagation losses for various waveguide widths on both polysilicon and crystalline silicon platforms. We find that as the width increases for polysilicon waveguides, the propagation loss decreases similar to crystalline silicon waveguides. At a waveguide width of 10µm, polysilicon and crystalline silicon waveguides have propagation losses of 0.56dB/cm and 0.31 dB/cm, respectively, indicating there is little bulk absorption from the polysilicon and is the lowest propagation loss for polysilicon demonstrated to date. In addition, the first 1x12 polysilicon MMI is demonstrated with a low insertion loss of −1.29dB and a high uniformity of 1.07dB. These results vindicate the use of polysilicon waveguides of varying widths in photonic integrated circuits

Phase 1 Study of Two Merozoite Surface Protein 1 (MSP1(42)) Vaccines for Plasmodium falciparum Malaria

OBJECTIVES: To assess the safety and immunogenicity of two vaccines, MSP1(42)-FVO/Alhydrogel and MSP1(42)-3D7/Alhydrogel, targeting blood-stage Plasmodium falciparum parasites. DESIGN: A Phase 1 open-label, dose-escalating study. SETTING: Quintiles Phase 1 Services, Lenexa, Kansas between July 2004 and November 2005. PARTICIPANTS: Sixty healthy malaria-naïve volunteers 18–48 y of age. INTERVENTIONS: The C-terminal 42-kDa region of merozoite surface protein 1 (MSP1(42)) corresponding to the two allelic forms present in FVO and 3D7 P. falciparum lines were expressed in Escherichia coli, refolded, purified, and formulated on Alhydrogel (aluminum hydroxide). For each vaccine, volunteers in each of three dose cohorts (5, 20, and 80 μg) were vaccinated at 0, 28, and 180 d. Volunteers were followed for 1 y. OUTCOME MEASURES: The safety of MSP1(42)-FVO/Alhydrogel and MSP1(42)-3D7/Alhydrogel was assessed. The antibody response to each vaccine was measured by reactivity to homologous and heterologous MSP1(42), MSP1(19), and MSP1(33) recombinant proteins and recognition of FVO and 3D7 parasites. RESULTS: Anti-MSP1(42) antibodies were detected by ELISA in 20/27 (74%) and 22/27 (81%) volunteers receiving three vaccinations of MSP1(42)-FVO/Alhydrogel or MSP1(42)-3D7/Alhydrogel, respectively. Regardless of the vaccine, the antibodies were cross-reactive to both MSP1(42)-FVO and MSP1(42)-3D7 proteins. The majority of the antibody response targeted the C-terminal 19-kDa domain of MSP1(42), although low-level antibodies to the N-terminal 33-kDa domain of MSP1(42) were also detected. Immunofluorescence microscopy of sera from the volunteers demonstrated reactivity with both FVO and 3D7 P. falciparum schizonts and free merozoites. Minimal in vitro growth inhibition of FVO or 3D7 parasites by purified IgG from the sera of the vaccinees was observed. CONCLUSIONS: The MSP1(42)/Alhydrogel vaccines were safe and well tolerated but not sufficiently immunogenic to generate a biologic effect in vitro. Addition of immunostimulants to the Alhydrogel formulation to elicit higher vaccine-induced responses in humans may be required for an effective vaccine

Microbial activity in the marine deep biosphere: progress and prospects

The vast marine deep biosphere consists of microbial habitats within sediment, pore waters, upper basaltic crust and the fluids that circulate throughout it. A wide range of temperature, pressure, pH, and electron donor and acceptor conditions exists—all of which can combine to affect carbon and nutrient cycling and result in gradients on spatial scales ranging from millimeters to kilometers. Diverse and mostly uncharacterized microorganisms live in these habitats, and potentially play a role in mediating global scale biogeochemical processes. Quantifying the rates at which microbial activity in the subsurface occurs is a challenging endeavor, yet developing an understanding of these rates is essential to determine the impact of subsurface life on Earth's global biogeochemical cycles, and for understanding how microorganisms in these “extreme” environments survive (or even thrive). Here, we synthesize recent advances and discoveries pertaining to microbial activity in the marine deep subsurface, and we highlight topics about which there is still little understanding and suggest potential paths forward to address them.This is the publisher’s final pdf. The published article is copyrighted by the author(s) and published by Frontiers Research Foundation. The published article can be found at: http://www.frontiersin.org/Microbiology.Keywords: Subsurface microbiology, Biogeochemistry, C-DEBI, Deep biosphere, IODP, Sediment, Oceanic crustKeywords: Subsurface microbiology, Biogeochemistry, C-DEBI, Deep biosphere, IODP, Sediment, Oceanic crus