The one-share, one-vote structure VS. dual-class structure VS. partnership structure
Separation of control rights & cash flow rights
Companies such as Google, Groupon, Facebook, and other tech companies use dual-class shares.
Before dual-class shares became all the rage with technology companies, they were quite prominent at media companies such as the New York Times, Washington Post, and News Corp. The argument was that the dual-class structure helped these media companies keep their journalistic integrity.
Defenders of dual-class shares claim that the structure allows them to focus more on long-term performance than on short-term returns. However, by adopting a dual-class structure companies are sending the message that they want to control a majority of the votes but not take a majority of the risk. Another way to say it is that they want the public’s capital, just not their opinions.
Alibaba’s Partnership Structure v. Dual- Class Share
Separation of control rights & cash flow rights
Companies such as Google, Groupon, Facebook, and other tech companies use dual-class shares.
Before dual-class shares became all the rage with technology companies, they were quite prominent at media companies such as the New York Times, Washington Post, and News Corp. The argument was that the dual-class structure helped these media companies keep their journalistic integrity.
Defenders of dual-class shares claim that the structure allows them to focus more on long-term performance than on short-term returns. However, by adopting a dual-class structure companies are sending the message that they want to control a majority of the votes but not take a majority of the risk. Another way to say it is that they want the public’s capital, just not their opinions.
Alibaba’s Partnership Structure v. Dual- Class Share
masulis-2009-agency_problems_at_dual-class_companies.pdf |
pajuste-2005-determinants_and_consequences_of_the_unification_of_dual-class_shares.pdf |
amoako-2001-dual_class_firms_capitalization_ownership_structure_and_recapitalization_back_into_single_class.pdf |
dimitro-2006-recapitalization_of_one_class_of_common_stock_into_dual-class_growth_and_long-run_stock_returns.pdf |
lauterbach-2011-long_term_changes_in_voting_power_and_control_structure_following_the_unification_of_dual_class_shares.pdf |