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It adds a level of stability. Some institutional investors don't want shareholders to have power over a company because that opens the doors to things like hos
by sandworm101 5y ago
It adds a level of stability. Some institutional investors don't want shareholders to have power over a company because that opens the doors to things like hostile takeovers. Having all the voting power vested in the core "founders" means the company won't ever be subject to change from outside. So, if you like things as they are, you can rest assured that things likely will never change. Only a long term investor, someone willing to retain shares during a corporate crisis, really cares about actually voting out one board for another. A short term investor wants to ride on the coattails but will jump rather than attempt to change where those coattails are headed.
- matheusmoreira 5y agoWhat is the point of publicly trading a company if the public can never actually gain control of it? That would make it solely about speculation.
- sandworm101 5y ago>> it's just about speculation. As opposed to all the other reasons people buy publicly-traded shares?
- matheusmoreira 5y agoI thought the power to affect corporate decision making was an important part of investing. Apparently not.
- sandworm101 5y agoThat power is still there. By selling their non-voting shares investors lower their price, which has knock-on impacts on the corporation. What is lost is the power to directly make corporate decisions.
- matheusmoreira 5y ago> What is lost is the power to directly make corporate decisions. That's what I meant.
- depaulagu 5y agoDefinitely not for individual-saving-for-retirement investors IMO (altough there might be some that think that's important, but they can't affect nothing really). What matters most to these (me included) is the growth of the nest egg, by dividends or capital gains (which FB has delivered handsomely on the last decade). For large institutional investors, it may be important. For activist investors, it certainly is.