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I still don't exactly understand what the value of a non-voting share is. What rights does it confer, exactly. Why do I want to own it?

henryfjordan 7y ago
You still own a share of the company. If they pay dividends, you get one.
- Viliam1234 7y ago
  But if you can't vote about whether they pay the dividends... what is preventing the owner of the voting share to simply never pay dividends, and transfer the profit to their own pocket using some other method, for example giving themselves a really high salary, or starting a new company and transferring the profits there?
  - henryfjordan 7y ago
    When you are making decisions on behalf of a corporation, you legally have to make the best decision for the shareholders. There's a lot of wiggle-room in that, but the courts will see through the most egregious stuff. So if you own non-voting shares and the voting shares decide not to give dividends and instead buy a useless corporate yacht for themselves to use, you can sue.
emilfihlman 7y ago
They can be of anything, usually (almost always) dividends, but can be rights to something, like profits directly, too.
Aeolun 7y ago
It’s like a bitcoin, you buy it because you expect the price to rise, and someone else to buy it at that price.
berberous 7y ago
Non-voting stock in a private company is rare, but if the company exits for a value where the liquidation preference of preferred stock doesn't matter, all shareholders share in the distributions pro rata. So if you own 10% of a company via non-voting stock, you generally own 10% of the economics, you just can't vote on decisions that require a stockholder vote. Of course, the value of 1 non-voting share should have a discount to 1 voting share, but if you own a small stake, there's not much of a difference since your vote doesn't count for much regardless.
twblalock 7y ago
Non-voting shares are as much of an investment in the value of the company as the voting shares are -- you would hope they increase in value, and they may also pay dividends. When you invest in ETFs or mutual funds you don't normally get voting rights either -- the fund manager does. Despite that, ETFs and mutual funds are the best type of investment for average people who want to save for retirement.

henryfjordan 7y ago

You still own a share of the company. If they pay dividends, you get one.

Viliam1234 7y ago
But if you can't vote about whether they pay the dividends... what is preventing the owner of the voting share to simply never pay dividends, and transfer the profit to their own pocket using some other method, for example giving themselves a really high salary, or starting a new company and transferring the profits there?
- henryfjordan 7y ago
  When you are making decisions on behalf of a corporation, you legally have to make the best decision for the shareholders. There's a lot of wiggle-room in that, but the courts will see through the most egregious stuff. So if you own non-voting shares and the voting shares decide not to give dividends and instead buy a useless corporate yacht for themselves to use, you can sue.

emilfihlman 7y ago

They can be of anything, usually (almost always) dividends, but can be rights to something, like profits directly, too.

Aeolun 7y ago

It’s like a bitcoin, you buy it because you expect the price to rise, and someone else to buy it at that price.

berberous 7y ago

Non-voting stock in a private company is rare, but if the company exits for a value where the liquidation preference of preferred stock doesn't matter, all shareholders share in the distributions pro rata. So if you own 10% of a company via non-voting stock, you generally own 10% of the economics, you just can't vote on decisions that require a stockholder vote. Of course, the value of 1 non-voting share should have a discount to 1 voting share, but if you own a small stake, there's not much of a difference since your vote doesn't count for much regardless.

twblalock 7y ago

Non-voting shares are as much of an investment in the value of the company as the voting shares are -- you would hope they increase in value, and they may also pay dividends. When you invest in ETFs or mutual funds you don't normally get voting rights either -- the fund manager does. Despite that, ETFs and mutual funds are the best type of investment for average people who want to save for retirement.