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by Dylan16807 1716 days ago
> But it is easy to imagine that this happened to be able to hoodwink someone with the "Zuckerburg only controls 10% of the shares!" style soundbites without being forced to point out that means control of the company.

Does that hoodwinking matter, though? If you're unsophisticated enough to be tricked by this, you have 0% voting power. And at best you expected "someone other than zuckerburg, I guess, but I didn't look into who" to have voting power, and that seems so vague that it being false doesn't hurt you.
2 comments
roenxi 1716 days ago
In principle, I have no argument.

In practice, it leaves open the question of why anyone felt the need for 2 classes of shares. Why have 1 class A and 9 class B, instead of 100 shares for the company owner and 9 on the market? One of those is much simpler to work with. Maybe there is just some tax loophole that is being exploited here, but it looks like someone is getting scammed.

Not the biggest crisis I've seen today, but something that should get tidied up.

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Dylan16807 1716 days ago
> Why have 1 class A and 9 class B, instead of 100 shares for the company owner and 9 on the market?

Because you want to sell more of the company without losing control. Changing that would be a lot more complicated than tidying up.

But consider a scenario where all shares have the same voting power, and class B shares have 100x the dividends and own 100x as many assets. With 100 class A and 9 class B.

In this scenario, the class A shares are much worse than class B shares. But the end result is the same: the founder can own 10% of the company value while having 90% of the votes.

Surely the founder isn't getting scammed here, despite their shares being so much weaker, right? And it would be strange to say the people with the superior class B shares are being scammed. But this is basically equivalent to having good class A and bad class B. So now what?

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matheusmoreira 1716 days ago
> If you're unsophisticated enough to be tricked by this, you have 0% voting power.

Doesn't mean that tricking people should be allowed.

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Dylan16807 1716 days ago
Not always, but tricking people is usually allowed. You have to have pretty specific harm before you get into fraud territory.
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