3 ms·

If only the shareholders had any kind of voice - if only it was illegal to issue a fake IPO where you sell an overwhelming number of shares stripped of their vo

by munk-a 4mo ago

If only the shareholders had any kind of voice - if only it was illegal to issue a fake IPO where you sell an overwhelming number of shares stripped of their voting power - if only the market responded rationally to this boondoggle. If we're going to right the ship in turn of common sense a bunch of people need to lose a bunch of money, I just hope it doesn't mostly hit passive investors and instead lands mostly on Elon-stans.

verzali 4mo ago
I suppose they kind of do, they could sell the stock and drive the price down. That wouldn't force Musk to change direction, but it would hurt his wealth.
- munk-a 4mo ago
  If he was smart it'd be to a very limited extent. If you have this much wealth in something as unpredictable as the stock market I think the very wise move is to start converting it into stock backed loans[1] that you leverage to buy real assets - buy islands and small countries, buy other successful large companies and just let them keep trending slowly upwards, pick up that New Zealand bunker... just try and get your money diversified and into things that would survive a stock price collapse. Even if Elon did this with 1% or 10% of his wealth and kept the vast majority of his assets invested in this one clump of companies and they went to zero he'd still be sitting on an insane pile of cash. 1. Lets all pour out a drink to the bankers who authorize such insane loan agreements.
over_bridge 4mo ago
How is it legal to have different share classes? You could make 100 shares that can vote and then sell 99.9% of the company while maintaining full control. Seems strongly against the spirit of a publicly traded company
- LearnYouALisp 4mo ago
  Who has the gold makes the rules
- andruby 4mo ago
  Most large companies do that these days: GOOG, META all have different share classes. Even the small startup I worked for had that.
  - interestpiqued 4mo ago
    I mean that just begs the question how we got to this point. And how far detached is the public market from real value. Many shares don’t confer actual value. Hell a lot of these companies don’t pay dividends in addition to very little or no voting rights.
    - munk-a 4mo ago
      Dividends are an interesting topic. There are sort of two ways to view the stock market - one is as a loan with a very drawn out repayment schedule that may be amicably adjusted for the health of the company (that one relies on two repayment strategies, dividends, buybacks and acquisitions). Once a company has issued stock the only two real reasons to care about the value is for the utility as a valuation tool which has steeply fallen off with indepth audits becoming the norm and, of course, further stock issuance - a healthy share price allows less dilution for further issuance. The other view of the stock market is just pure gambling - if you take away the disbursements and shareholder voting control then all that's left is the valuation which we can do better in different ways (and stock price is often disregarded when considering loans and M&A except when the difference can be arbitraged). Really, it's kind of all meaningless BS, but as long as most people believe it isn't then it's a great way to grow assets by doing nothing which is an activity that we apparently want to encourage?
      - interestpiqued 4mo ago
        I wouldn’t see it as just pure gambling. I’m not a dividend queen that really cares all That much about it. I do think we are sliding along the scale from shares having intrinsic value as an ownership stake in an income producing asset to collector cards that we track societies valuation of a company with. And at some point in the next 50 years shit will hit the fan. Unfortunately sitting it out isn’t really an option either
- skissane 4mo ago
  Musk didn’t invent the idea of using multiple share classes to ensure the founder(s) retain control of the company, see Rupert Murdoch, Google, Facebook, etc From the regulators’ perspective: it is a risk, but you disclosed that risk in the prospectus that buyers are assumed to have read (what percentage ever actually do?), hence it is fine Well, when you buy into an IPO, they make you sign to say you read it. So either you did, or you made a false statement on a legal document
- Kirby64 4mo ago
  There's some companies (Snap being one of them) where certain classes of shares have NO voting rights. If you think SpaceX is lopsided, look at Snap's shares. They have A, B, and C class. The founders of Snap own 95% of the voting through their Class C shares... literally only pre-IPO folks have any voting rights.
CrimsonRain 4mo ago
If only you there were companies who could choose which type of shares they'd like to offer...and if only people could buy the types they want from the company that aligns with their ideas... Passive "investors" can go and invest in ETF or whatever else that does not include company shares without voting rights.

by munk-a 4mo ago

verzali 4mo ago

I suppose they kind of do, they could sell the stock and drive the price down. That wouldn't force Musk to change direction, but it would hurt his wealth.

munk-a 4mo ago
If he was smart it'd be to a very limited extent. If you have this much wealth in something as unpredictable as the stock market I think the very wise move is to start converting it into stock backed loans[1] that you leverage to buy real assets - buy islands and small countries, buy other successful large companies and just let them keep trending slowly upwards, pick up that New Zealand bunker... just try and get your money diversified and into things that would survive a stock price collapse. Even if Elon did this with 1% or 10% of his wealth and kept the vast majority of his assets invested in this one clump of companies and they went to zero he'd still be sitting on an insane pile of cash. 1. Lets all pour out a drink to the bankers who authorize such insane loan agreements.

over_bridge 4mo ago

How is it legal to have different share classes? You could make 100 shares that can vote and then sell 99.9% of the company while maintaining full control. Seems strongly against the spirit of a publicly traded company

LearnYouALisp 4mo ago
Who has the gold makes the rules
andruby 4mo ago
Most large companies do that these days: GOOG, META all have different share classes. Even the small startup I worked for had that.
- interestpiqued 4mo ago
  I mean that just begs the question how we got to this point. And how far detached is the public market from real value. Many shares don’t confer actual value. Hell a lot of these companies don’t pay dividends in addition to very little or no voting rights.
  - munk-a 4mo ago
    Dividends are an interesting topic. There are sort of two ways to view the stock market - one is as a loan with a very drawn out repayment schedule that may be amicably adjusted for the health of the company (that one relies on two repayment strategies, dividends, buybacks and acquisitions). Once a company has issued stock the only two real reasons to care about the value is for the utility as a valuation tool which has steeply fallen off with indepth audits becoming the norm and, of course, further stock issuance - a healthy share price allows less dilution for further issuance. The other view of the stock market is just pure gambling - if you take away the disbursements and shareholder voting control then all that's left is the valuation which we can do better in different ways (and stock price is often disregarded when considering loans and M&A except when the difference can be arbitraged). Really, it's kind of all meaningless BS, but as long as most people believe it isn't then it's a great way to grow assets by doing nothing which is an activity that we apparently want to encourage?
    - interestpiqued 4mo ago
      I wouldn’t see it as just pure gambling. I’m not a dividend queen that really cares all That much about it. I do think we are sliding along the scale from shares having intrinsic value as an ownership stake in an income producing asset to collector cards that we track societies valuation of a company with. And at some point in the next 50 years shit will hit the fan. Unfortunately sitting it out isn’t really an option either
skissane 4mo ago
Musk didn’t invent the idea of using multiple share classes to ensure the founder(s) retain control of the company, see Rupert Murdoch, Google, Facebook, etc From the regulators’ perspective: it is a risk, but you disclosed that risk in the prospectus that buyers are assumed to have read (what percentage ever actually do?), hence it is fine Well, when you buy into an IPO, they make you sign to say you read it. So either you did, or you made a false statement on a legal document
Kirby64 4mo ago
There's some companies (Snap being one of them) where certain classes of shares have NO voting rights. If you think SpaceX is lopsided, look at Snap's shares. They have A, B, and C class. The founders of Snap own 95% of the voting through their Class C shares... literally only pre-IPO folks have any voting rights.

CrimsonRain 4mo ago

If only you there were companies who could choose which type of shares they'd like to offer...and if only people could buy the types they want from the company that aligns with their ideas... Passive "investors" can go and invest in ETF or whatever else that does not include company shares without voting rights.