Corporate Governance and Independent Directors' Role in Public Companies With Dual Share Structure
The Snap IPO has brought to light the topic of dual-share structured companies and may leave other companies planning to go public wondering whether a dual-class share structure is right for them.
July 22, 2017 at 12:14 AM
17 minute read
On March 1, 2017, Snap Inc. priced its highly anticipated initial public offering (IPO), marking the largest U.S. tech IPO since Facebook went public in 2012. What made the Snap IPO particularly noteworthy was its dual-class share structure, featuring shares of common stock with no voting rights. The Snap IPO has brought to light the topic of dual-share structured companies and may leave other companies planning to go public wondering whether a dual-class share structure is right for them.
What is a dual-class share structure?
Traditionally, when a company went public to raise money, investors could expect voting rights roughly proportionate to the size of their investments. Increasingly, however, companies are electing to go public with dual-class share structures that give some shareholders greater voting rights per share than others, and as recently as the Snap IPO, offer no voting rights at all to their investors. As a result, shareholders (typically the founders of these companies) who own only a small portion (or less than majority) of a company's capital stock are able to retain a majority of the voting power, and thus, control of the company.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Fatal Shooting of CEO Sets Off Scramble to Reassess Executive Security
5 minute read
Ben & Jerry’s Accuses Corporate Parent of ‘Silencing’ Support for Palestinian Rights
3 minute read
Shareholder Activists Poised to Pounce in 2025. Is Your Board Ready?
Regulatory Upheaval Is Coming. How Businesses Prepare and Respond Will Separate Winners and Losers
Trending Stories
- 1Tensions Run High at Final Hearing Before Manhattan Congestion Pricing Takes Effect
- 2Improper Removal to Fed. Court Leads to $100K Bill for Blue Cross Blue Shield
- 3Michael Halpern, Beloved Key West Attorney, Dies at 72
- 4Burr & Forman, Smith Gambrell & Russell Promote More to Partner This Year
- 5Sanctions Order Over Toyota's Failure to Provide English Translations of Documents Vacated by Appeals Court
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
