[gabbo]

And not just S&P, also FTSE Russell: https://www.bloomberg.com/news/articles/2017-07-27/index-pla...

This is a big deal (in a good way, IMO). Companies have a very real disincentive to go public with a shareholder-rights-unfriendly listing now, since a large portion of the passive investment universe will be prohibited from ever buying.

I see this as a case where everybody wins: the default option ends up being friendly to shareholder rights, but if you really want to and are in an advantageous position you still have the option to list go public with non-voting/less-voting shares if you want to gamble.

[pm90]

Well...kinda. I don't know if they were invented for this specific purpose, but preferential shares do prevent activist shareholders from imposing their will on public companies, forcing them to take actions that are very short term. Preferential shares actually prevent that from happening, which is great.

This is a new dimension in that struggle. I don't know how this will pan out...

One thing I don't understand is why don't index funds take preferential shares into account when deciding which ones to buy/sell? Couldn't that be factored into the decision engine's rules/algorithms?

[HappyTypist]

Passive funds should have consistent and binary rules. Either you're in, or you're out.

Anything more than that is "smart index" aka active.