Investors can be meddlers, especially restless ones. They’re passive and pleased when the hockey stick curve is the picture, but a few setbacks later and suddenly they think they could run the company better. They’re owners after all. Minority owners, no doubt, but if they get together and vote as a bloc there’s some power there. A founder can get the boot, perhaps, because a bunch of people who know little about the daily ins and outs of the biz are dissatisfied. Well that’s the way it used to be — in the new world shareholder revolt will be increasingly passe.
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Because shareholder activism just isn’t possible with an IPO like Snap, for instance. The common shares Snap offered in its IPO are Class A, which sounds great, but Class A shares of Snap confer zero voting rights. Class B you get one vote. Class C — well that’s the money shot: 10 votes per share. Guess which kind the now permanently ensconced founders Evan Spiegel and Robert Murphy have? Snap shares skyrocketed this week after its IPO — and all those non-voting shares happily rose 50-plus percent. But whatever the “camera company” does next, those shareholders will be passive observers. It’s a sign of the times in more ways than one. Businesses like grocery store chains, for instance, were businesses regular folk shareholders could pretty much understand, or thought they could anyway — the P&Ls made sense. But when it comes to digital age companies like Snap, which lost more than $500 million last year to prepare for its big day, the vision and decisions are probably better left to the experts. Right? Silent satisfied Snap shareholders agree.
