Non-voting stock is the stock that provides the shareholder very little or no vote on corporate matters, such as election of the board of directors or mergers. This type of share is usually implemented for individuals who want to invest in the company's profitability and success at the expense of voting rights in the direction of the company. Preferred stock typically has non-voting qualities.[1]
Many countries such as Germany, Russia, the United Kingdom[citation needed] and other commonwealth realms have laws or policies against multiple/non-voting stock. In the US, not all corporations offer voting stock and non-voting stock, nor do all stocks usually have equal voting power. Warren Buffett's Berkshire Hathaway corporation has two classes of stocks, Class A voting stock (NYSE: BRK.A) and Class B non-voting stock (NYSE: BRK.B). The Class B stock carries 1/10,000th of the voting rights of the Class A stock, but 1/1,500th of the dividend.
Non-voting stock may also thwart hostile takeover attempts. If the founders of a company maintain all of the voting stock and only sell non-voting stock to the public, takeover attempts are unlikely. They may occur only if the founders are willing to tender an offer by an unfriendly bidder.
There are consequences to not releasing voting rights to common shareholders; these include fewer supplicants for a friendly takeover, displeased shareholders as a result of the corporation's limited growth potential, and difficulty finding bidders for additional non-voting shares in the market. However, this is debatable since all publicly traded companies have their common shares in the open market for anyone to purchase. Examples include Tencent buying a non-voting 12% stake in Snap Inc. in 2017.[2]
^Brewer, Charles; Haas, Steven (November 30, 2017). "Nonvoting Common Stock: A Legal Overview". The Harvard Law School Forum on Corporate Governance. Retrieved April 27, 2022.
^"Video games could be next for Snapchat, China's Tencent says". Reuters. 9 November 2017.
Further readingedit
"Non-Voting Stock and "Bankers' Control" April, 1926", Harvard Law Review, 39 (6): 673-693, JSTOR 1329574.pdf
January 01, 1970
voting, stock, this, article, needs, additional, citations, verification, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, scholar, jstor, february, 20. This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Non voting stock news newspapers books scholar JSTOR February 2018 Learn how and when to remove this message Non voting stock is the stock that provides the shareholder very little or no vote on corporate matters such as election of the board of directors or mergers This type of share is usually implemented for individuals who want to invest in the company s profitability and success at the expense of voting rights in the direction of the company Preferred stock typically has non voting qualities 1 Many countries such as Germany Russia the United Kingdom citation needed and other commonwealth realms have laws or policies against multiple non voting stock In the US not all corporations offer voting stock and non voting stock nor do all stocks usually have equal voting power Warren Buffett s Berkshire Hathaway corporation has two classes of stocks Class A voting stock NYSE BRK A and Class B non voting stock NYSE BRK B The Class B stock carries 1 10 000th of the voting rights of the Class A stock but 1 1 500th of the dividend Contents 1 Takeover 2 See also 3 References 4 Further readingTakeover editNon voting stock may also thwart hostile takeover attempts If the founders of a company maintain all of the voting stock and only sell non voting stock to the public takeover attempts are unlikely They may occur only if the founders are willing to tender an offer by an unfriendly bidder There are consequences to not releasing voting rights to common shareholders these include fewer supplicants for a friendly takeover displeased shareholders as a result of the corporation s limited growth potential and difficulty finding bidders for additional non voting shares in the market However this is debatable since all publicly traded companies have their common shares in the open market for anyone to purchase Examples include Tencent buying a non voting 12 stake in Snap Inc in 2017 2 See also editMergers and acquisitions Microeconomics Industrial organization Voting interestReferences edit Brewer Charles Haas Steven November 30 2017 Nonvoting Common Stock A Legal Overview The Harvard Law School Forum on Corporate Governance Retrieved April 27 2022 Video games could be next for Snapchat China s Tencent says Reuters 9 November 2017 Further reading edit Non Voting Stock and Bankers Control April 1926 Harvard Law Review 39 6 673 693 JSTOR 1329574 pdf Retrieved from https en wikipedia org w index php title Non voting stock amp oldid 1199086172, wikipedia, wiki, book, books, library,
