Re:Snapchat Founders’ Grip Tightened After a Spat with an Ea...
by marvin on Friday February 24, 2017 @04:54PM
(#13728283)
Okay, thanks for the info. I was asking more due to the general case; if a stock class has no voting rights and never will receive dividends, it is effectively worthless unless holders of other stock classes voluntarily give away their money (they won't).
I am a little puzzled at some of the latest innovations in the US stock markets. I can understand investing in a company that a small group of insiders will always have majority control in, as long as all owners are treated equally wrt. all forms of payouts. I really don't understand why the market would assign value to a stock class with no voting rights and no plausible scenario for returning capital to stockholders.
Normally Class A has the voting right and Class B has not.
But I would also like a clarification on this from somebody that actually knows. The S1 filing for Snap Inc. states:
"We have paid a stock dividend of our Class A common stock on our capital stock in the past and from time to time in the future may pay special or regular stock dividends in the form of Class A common stock, which per the terms of our amended and restated certificate of incorporation must be paid equally to all stockholders."
"Equally to all stockholders", does that mean all Class A holders or both A and B holders?