Snap vs. S&P Global: 3 Reasons Why I’m on Snap’s Side
S&P Global (NYSE: SPGI) made headlines when it decided that multi-class shares were unfit for its most prestigious indexes, a decision that increasingly appears to be aimed at making an example of Snap (NYSE: SNAP), which employs a multi-class share structure that concentrates corporate voting power in the hands of its insiders. While I consider myself an advocate for shareholder rights and the importance of good corporate governance, I can't help but feel that S&P Global's decision is somewhat arbitrary and inconsistent with previous changes to its indices. Here are three reasons I'm on Snap's side, despite its dual-class share structure.
While S&P Global may be making an example of Snap, the dual-class share structure it employs isn't exactly rare among publicly traded companies. In fact, roughly 10% of publicly traded companies have a multi-class share structure that gives one share class more voting power than another.
The list of multi-class stocks includes high-performing companies like Berkshire Hathaway, Nike, Workday, Facebook, among countless others. Of course, it also includes some losers, including Snap and Blue Apron, which have performed poorly since their public debuts.
Source: Fool.com
