Re:Facebook whistleblower says she wants to fix company, not...
by Dylan16807 on Monday October 04, 2021 @04:28PM
(#28751662)
> Why have 1 class A and 9 class B, instead of 100 shares for the company owner and 9 on the market?
Because you want to sell more of the company without losing control. Changing that would be a lot more complicated than tidying up.
But consider a scenario where all shares have the same voting power, and class B shares have 100x the dividends and own 100x as many assets. With 100 class A and 9 class B.
In this scenario, the class A shares are much worse than class B shares. But the end result is the same: the founder can own 10% of the company value while having 90% of the votes.
Surely the founder isn't getting scammed here, despite their shares being so much weaker, right? And it would be strange to say the people with the superior class B shares are being scammed. But this is basically equivalent to having good class A and bad class B. So now what?
Because you want to sell more of the company without losing control. Changing that would be a lot more complicated than tidying up.
But consider a scenario where all shares have the same voting power, and class B shares have 100x the dividends and own 100x as many assets. With 100 class A and 9 class B.
In this scenario, the class A shares are much worse than class B shares. But the end result is the same: the founder can own 10% of the company value while having 90% of the votes.
Surely the founder isn't getting scammed here, despite their shares being so much weaker, right? And it would be strange to say the people with the superior class B shares are being scammed. But this is basically equivalent to having good class A and bad class B. So now what?