8 ms·

I've always wondered what you're really getting with a non-voting share that has no dividends attached, especially from a company as big as Facebook that isn't

I've always wondered what you're really getting with a non-voting share that has no dividends attached, especially from a company as big as Facebook that isn't going to get acquired. Related: has there been any academic investigation to how investors value votes?

SapphireSun 10y ago
That's pretty strange. You'd only get liquidity unrelated to selling the shares from the company being bought or liquidated or in share buybacks. I guess it's more likely that a company of facebook's size can't really die, just sliced apart until nothing at the core remains. Some of those cuts will be profitable and some unprofitable...
dpark 10y ago
> Related: has there been any academic investigation to how investors value votes? Apparently they don't value them very highly. Goog and Googl are only about 2% apart.
- maxerickson 10y ago
  With significant insider or founder control, the other voting shares don't really have much influence anyway. Or just in a so called blue chip. What meaning does 1000 voting shares of Ford really have?
  - kang 10y ago
    > What meaning do 1000 votes have Then why don't we ask the same in a democracy?
    - beeboop 10y ago
      Democracy doesn't have proxy voting when it's the public voting for representatives.
      - deleted 10y ago
        [deleted]
      - TheSpiceIsLife 10y ago
        But that's exactly what a representative is: A delegate you entrust to vote on your behalf.
    - maxerickson 10y ago
      Because there are people that directly control millions of votes in companies and no similar structures in a democracy. The number of shares is the wrong number to reason about, it's the percentage of control that is interesting. If an individual has 51% (or more) control, the comparison to a democracy is obviously nonsense. (I used 1000 shares because it feels like a big number of shares but is still an utterly insignificant portion of Ford, which has a bit less than 4 billion shares)
      - kang 10y ago
        So minorities should not vote?
        maxerickson 10y ago
        They should do whatever they want to do. My point is that when a situation is futile, they should recognize that it is futile. A protest vote for a board member of a company strikes me as one of the more pointless ways to exercise a right to process.
    - ndesaulniers 10y ago
      Unlike a democracy, in the stock market you can pay to have your vote count for more than others'.
      - takeda 10y ago
        Isn't that how democracy generally ends up working?
        ndesaulniers 10y ago
        Being familiar with the US form of democracy that involves lots of lobbyist money, it would seem.
        philovivero 10y ago
        Why is this comment down-voted? In democracy, you can spend money on a PR campaign to sway many millions of votes your way. And as another commenter noted, once a candidate is in place, lobbyists can pay to get proper legislation passed. Finally, voting is rigged in any place where voting computers are installed, which appears to be a lot of places. Again, for the right money, you can completely change the course of an election.
    - rhino369 10y ago
      You probably should. It's why I don't vote. Waste of effort.
lisper 10y ago
> what you're really getting A shot at some day finding a bigger fool than you to buy your shares for more than you paid.
- ywecur 10y ago
  Also the profit the company chooses to distribute at the end of the year...
  - aniro 10y ago
    >>a non-voting share that has no dividends attached
- forgetsusername 10y ago
  This sounds cynical, but you're absolutely right: that value of a share in a company which will never return capital to its shareholders is precisely zero. People find that hard to believe, but it's true. Why would the last "greater fool" pay anything for it? Work backwards from there.
onewaystreet 10y ago
Most of the daily trading in stocks these days is not from people that are long term.
jhh 10y ago
Isn't the voting right attached to a stock irrelevant to almost all individual stock holders?
- nothrabannosir 10y ago
  It (hopefully) makes them more valuable to potential buyers who do intend to own a significant portion.
msellout 10y ago
The buyer of non-voting shares is betting that eventually the company will start a dividend or share-buyback program, or that there will be a subsequent buyer that will pay more than the current price.
- funkyy 10y ago
  At least in theory...
cbhl 10y ago
A lot of engineers will probably get non-voting shares as RSUs, especially new engineers, acquihires, and refresher grants. They're hoping that they will get more shares than if the company had to continue issuing only voting shares, because it doesn't dilute the founders' control of the company as much.

SapphireSun 10y ago

That's pretty strange. You'd only get liquidity unrelated to selling the shares from the company being bought or liquidated or in share buybacks. I guess it's more likely that a company of facebook's size can't really die, just sliced apart until nothing at the core remains. Some of those cuts will be profitable and some unprofitable...

dpark 10y ago

> Related: has there been any academic investigation to how investors value votes? Apparently they don't value them very highly. Goog and Googl are only about 2% apart.

maxerickson 10y ago
With significant insider or founder control, the other voting shares don't really have much influence anyway. Or just in a so called blue chip. What meaning does 1000 voting shares of Ford really have?
- kang 10y ago
  > What meaning do 1000 votes have Then why don't we ask the same in a democracy?
  - beeboop 10y ago
    Democracy doesn't have proxy voting when it's the public voting for representatives.
    - deleted 10y ago
      [deleted]
    - TheSpiceIsLife 10y ago
      But that's exactly what a representative is: A delegate you entrust to vote on your behalf.
  - maxerickson 10y ago
    Because there are people that directly control millions of votes in companies and no similar structures in a democracy. The number of shares is the wrong number to reason about, it's the percentage of control that is interesting. If an individual has 51% (or more) control, the comparison to a democracy is obviously nonsense. (I used 1000 shares because it feels like a big number of shares but is still an utterly insignificant portion of Ford, which has a bit less than 4 billion shares)
    - kang 10y ago
      So minorities should not vote?
      - maxerickson 10y ago
        They should do whatever they want to do. My point is that when a situation is futile, they should recognize that it is futile. A protest vote for a board member of a company strikes me as one of the more pointless ways to exercise a right to process.
  - ndesaulniers 10y ago
    Unlike a democracy, in the stock market you can pay to have your vote count for more than others'.
    - takeda 10y ago
      Isn't that how democracy generally ends up working?
      - ndesaulniers 10y ago
        Being familiar with the US form of democracy that involves lots of lobbyist money, it would seem.
      - philovivero 10y ago
        Why is this comment down-voted? In democracy, you can spend money on a PR campaign to sway many millions of votes your way. And as another commenter noted, once a candidate is in place, lobbyists can pay to get proper legislation passed. Finally, voting is rigged in any place where voting computers are installed, which appears to be a lot of places. Again, for the right money, you can completely change the course of an election.
  - rhino369 10y ago
    You probably should. It's why I don't vote. Waste of effort.

lisper 10y ago

> what you're really getting A shot at some day finding a bigger fool than you to buy your shares for more than you paid.

ywecur 10y ago
Also the profit the company chooses to distribute at the end of the year...
- aniro 10y ago
  >>a non-voting share that has no dividends attached
forgetsusername 10y ago
This sounds cynical, but you're absolutely right: that value of a share in a company which will never return capital to its shareholders is precisely zero. People find that hard to believe, but it's true. Why would the last "greater fool" pay anything for it? Work backwards from there.

onewaystreet 10y ago

Most of the daily trading in stocks these days is not from people that are long term.

jhh 10y ago

Isn't the voting right attached to a stock irrelevant to almost all individual stock holders?

nothrabannosir 10y ago
It (hopefully) makes them more valuable to potential buyers who do intend to own a significant portion.

msellout 10y ago

The buyer of non-voting shares is betting that eventually the company will start a dividend or share-buyback program, or that there will be a subsequent buyer that will pay more than the current price.

funkyy 10y ago
At least in theory...

cbhl 10y ago

A lot of engineers will probably get non-voting shares as RSUs, especially new engineers, acquihires, and refresher grants. They're hoping that they will get more shares than if the company had to continue issuing only voting shares, because it doesn't dilute the founders' control of the company as much.