Matt Levine’s Money Stuff: Insider Trading in Private Companies

Pisces

Two approximately true things about the US stock market are:

1. Companies are required to publicly disclose everything about themselves that might be material to investors. This isn’t exactly true, and it doesn’t work seamlessly: Companies generally announce quarterly earnings shortly after the quarter ends, but there’s some period of time when the company’s executives pretty much know what the earnings release will say, but it hasn’t been published yet. Or companies will often negotiate mergers without first announcing “hey we’re in merger talks,” which is something that investors would probably want to know. But for the most part investors expect that most ...