"Stock" is just a way to split up ownership of a company, letting the owners vote on management.

Without this feature something isn't really a stock, at least not in spirit. It's more like the shittiest of trash-tier junk bonds.

A bond has a fixed return if held to maturity. Equity has unlimited upside and has no maturity. Stock is the residual claim on a company's assets after all other claims are settled. Equity isn't a junk bond, with or without voting rights.

Non-voting shares as an asset class are very much like junk bonds in that they give you no control of a company, and they are worse than junk bonds in that they are even lower than junior unsecured junk when it comes to recovery.

"Fixed return" isn't really relevant from a practical standpoint because shares and junk debt both have volatile prices, and price is what actually matters when it comes to securities like this.

> "Fixed return" isn't really relevant from a practical standpoint because shares and junk debt both have volatile prices...

It's absolutely relevant. Sometimes junior debt trades a little bit like equity but the point is that bonds mature whereas equity exists for the lifetime of a company.

>... price is what actually matters when it comes to securities like this.

Absolute return is what matters, not price. The return of a bond - junk or otherwise - is known on day one of a bond issuance in the absence of default. That makes fixed income a fundamentally different asset class to equity.

Even a junior perpetual junk bond is different to equity. The junk bond's coupons would be fixed, whereas dividends vary according to company profits.

What percentage of junk bonds are bought at issuance and held to maturity by investors? 0.5%? Maybe?

For literally everyone else, it is, in fact, price that matters.

> For literally everyone else, it is, in fact, price that matters.

I made the distinction between price and total return above because an asset's price can remain more or less constant while still being a profitable investment: for example a utility company with a high dividend yield.

Let me try another tack. Would you rather own non-voting equity or junior debt in a company that is about to strike a deal that will make them wildly profitable?

"junk stock"

And yet people keep buying FB stock, and IPOs with this same dual-class scheme (and no intent to ever pay dividends) still get hyped up. It's because the people buying them aren't long-term value investors, they're gamblers. They just hope to find another sucker to buy the stock at a higher price than they paid.

Maybe true, but they knew it going in. It’s not like it was a secret that he has the majority of the votes.

Yeah but it doesn't expire and the underlying asset can increase in value. And the interest rate can fluctuate. Not really comparable to a junk bond