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by t3rabytes 2663 days ago
Dual-class share setups are typically prohibited by most ETFs. That's why companies that do want to have more than one share class will trade them under different tickers ($GOOG vs $GOOGL).

Edit: Prohibited was the wrong word, looked down upon was probably better.
3 comments
elliekelly 2663 days ago
Thanks, can you explain a bit further? (Nerdy curiosity here, I've done a lot of legal work with mutual funds & hedge funds but have no experience with ETFs so I'm both clueless and curious.) Prohibited by what? The prospectus? And what exactly is prohibited that assigning a different ticker gets around the prohibition? SNAP has a similar structure but I don't remember hearing the same buzz about that being an issue for ETFs when they went public.
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t3rabytes 2663 days ago
A lot of it seems to come down to voting power. I linked a few articles that dive into it in this comment: https://news.ycombinator.com/item?id=19341955
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servercobra 2663 days ago
Do you knwo why that is? It seems like having the two tickers would have all the same issues.
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elliekelly 2663 days ago
Agreed, and now that I think about it a bit more the ticker symbol is largely meaningless. Institutional investors trade by CUSIP, not Ticker, and a unique CUSIP is assigned to each security (and each share class of a company's stock is a unique security) regardless of whether they share an issuer.
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kgwgk 2663 days ago
Different classes always trade with different tickers. When they trade, of course: Google has also a non-traded B class. (By the way, I don’t think the first statement is correct.)
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t3rabytes 2663 days ago
Prohibited was the wrong word, you're right. Institutional investors that run ETFs have become averse to dual class stocks ($SNAP, $LYFT) because they don't have the same voting power per share that they do with other share class setups. Indexes like S&P 500 have also stopped including listings that are dual-class -- this is changing though, see the articles I've linked below.

- https://www.cii.org/dualclass_stock - https://citywireusa.com/professional-buyer/news/crown-duals-... - https://www.washingtonpost.com/business/dual-class-shares/20...

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