In Defense of Dual-Class Stocks... And Readers Weigh in on Buybacks and Reshoring
In Defense of Dual-Class Stocks... And Readers Weigh in on Buybacks and Reshoring
Are dual-class stocks as anti-shareholder as they might appear to be?
In the February 16 Empire Financial Daily regarding Alphabet's (GOOGL) Google, I joked that if it hadn't been for the dual-class structure of its stock, activists probably would've been on the company's doorstep yesterday.
The very nature of the structure, with founders controlling the voting stock, makes it highly unlikely that an outsider can oust management or force profound changes.
My comments resonated with my old friend (and source) Lise Buyer, a partner at initial public offering ("IPO") consulting firm Class V Group. She's also a former tech analyst who used to work at Alphabet, where she advised on its IPO and the decision to use dual-class stocks. As she told me...
Yes, having been a part of the team that put it in place, I am not unbiased.
I disagree that the company and its common shareholders would have been better off spending tens of millions on legal fights and perhaps a proxy battle – mone…