[rkunde]

Unless something on the regulatory side changes, nothing will happen to direct listings. People want to own stocks that they believe will go up. That’s the long and short of it. Retail investors don’t read IPO prospectuses. Institutional investors will be more hesitant, naturally, but they have the resources and expertise to asses the risks, and any public company still has to comply with disclosure requirements, IPO or no. There was similar handwringing about companies selling non-voting shares on the stock market. Turns out most people don’t buy stock to vote it, and most people don’t vote even if they can.

[jquery]

A bit of an aside, but dual class shares should have a mandatory sunset clause no longer than 5 years. That way companies still can get public money via IPO for risky initiatives without fear of a quick takeover, but you avoid a situation where a company becomes little more than a slush fund for the obsessions of a wayward CEO (Facebook).

[vkou]

Why should we protect FB's investors from themselves?

And given the tiny spread in how voting versus non-voting shares trade, it doesn't seem that investors value voting rights very much.

[eganist]

I don't know that this is the right counter-argument against the point parent comment made. This counter argument is defeated pretty easily by pointing at all the other regulation that applies to public markets that private offerings (and thus accredited investors) don't have.

Op might actually have a point here, insofar as it would apply to public stock. If such a class separation exists with private stock, that's a risk an accredited investor is probably either good to understand or flush enough with cash to be protected. But Mark cratering stock that moms and pops bought into, that's a good fit for regulation like anything else involving public markets.

[vkou]

There is a lot of regulation, but it focuses on not screwing minority shareholders to the benefit of majority ones, responsibilities of the board, and not lying to shareholders.

A dual-structure set of shares does not result in any of these problems, or prevent litigation and enforcement surrounding them.

What the regulation doesn't protect, and shouldn't protect people from, is investing in honest, but dumb companies. The metaverse play was obviously dumb three years ago.

[refurb]

But why?

Buying a class of stock with no or minimal voting rights is known upfront. You don’t have to buy them and presumably they are price to take into account the lack of voting power.