Re:Adam Neumann planned for his children and grandchildren t...
by microtherion on Saturday October 19, 2019 @03:39PM
(#21300309)
> Without the dual-class, Starrett probably would have been bought out in a hostile takeover/leveraged buyout
Recently, in Switzerland, there was a company (Sika AG), where the founding family held 54% of the vote with 16% of the shares. When they wanted to cash out, they simply sold their shares to an outside investor at a sizable premium, and the remaining shares could potentially have ended up worthless (ultimately, after a multi year lawsuit, a compromise prevailed).
I own shares in two dual-class companies:
Berkshire is one, and there, the dual class nature has the effect of giving more-serious/rich investors more votes. The coming century will test whether that is a good idea.
Starrett is the other; there the dual class structure is designed to protect a once-family business that is still run by the family. To me, at present, it is a feature, not a bug. Without the dual-class, Starrett probably would have been bought out in a hostile takeover/leveraged buyout. Instead, the company endures, with a long-term vision. The coming decades will test my optimistic thesis.