[notanormalnerd]

I think a better way would be to keep the foundation and spin off a company that manufactures all of that. Sell 49% of that company in an IPO and keep the majority stake in the foundation. This way they can raise money for expansion while keeping the mission in line.

This also signals very clear to investors what this enterprise is about.

[gchadwick]

This is already the setup, the foundation owns the trading company and it is the trading company going to IPO.

From a quick scan it's not clear to me what share of ownership of RPi ltd the foundation would retain post IPO other than the foundation will be selling at least some of its stake:

> The Offer would be comprised of new Shares to be issued by the Company and existing shares to be sold by certain existing shareholders, including the Raspberry Pi Foundation, Raspberry Pi's existing majority shareholder.

[anticensor]

Are non-profits allowed to own any stock in publicly traded companies in Britain?

[gchadwick]

According to this: https://assets.publishing.service.gov.uk/government/uploads/... yes.

Note that the foundation has had a majority stake in RPi ltd (as a private company) for a long time this is not a new structure.

[londons_explore]

Yes, but as shareholders they must still act according to their 'purpose', which is a term in UK law that a charity can choose when it is set up as part of its charter, and then every action must be in accordance with.

[szundi]

Purpose of spinoff = get dividends to fund the original purpose

[hgomersall]

Non profits aren't generally charities.

[graemep]

Yes. large non-profits can need to invest a lot of money.

[Latty]

Isn't this already how it works? Raspberry Pi Ltd is a different company to the Raspberry Pi Foundation.

[syarb]

AFAIK, yep. Jeff Geerling (hi jeff!) has a great video about this. https://youtu.be/hrhE6MnGi1A?si=IeHs2GKYqPjqPXSb&t=305

[geerlingguy]

Hello there ;)

I would like to know how much the Pi Foundation would still own—could be an interesting dynamic there. And good for them to be able to use some of that profit for good (they do a lot of neat things for education / STEM).

[entropicdrifter]

Hopefully the foundation still controls the majority of votes regardless of the % ownership stake. They do too much good in the world to go full-blown public corpo

[torlok]

What are the economics of buying into a stock that has a 51% stakeholder, and doesn't pay dividends, outside of "line goes up"?

I know this is kind of a standard in tech, but it still eludes me where the value of the stock is.

[cchance]

LOL you act like the entire market isn't "line goes up" regardless of 51% or not.

And no its not just tech

[torlok]

Yes, it's "line goes up", but more in the P/E ratio sense, where the price of the stock doesn't reflect the true value of the company, however outside of tech you can usually reason that there's either dividends being paid, or the stock has a base value because if a company performs, and the stock price is low enough, it's worth for another entity to buy it out and take control of it. This gives a stock some real value, and company performance has real impact on the price of the stock. In the case of tech comapnies, it's often no dividends, and the owner has 51%, so the stock gives no share of the profits, and no voting power.

[andrewla]

Traditional answer is that there is future potential that they would issue more stock (to sacrifice their 51% stake) or at some point start to issue dividends.

[dukeyukey]

Raspberry Pi has paid out about $50 million in dividends already to it's parent company.

[vasco]

Line goes up is the same as dividends. If you genuinely don't know, you can easily find the reason why it's economically the same, while being fiscally more efficient to not emit dividends by doing a quick googling.

[torlok]

You completely missed the point of the question. They're not the same. Dividends give you a share of the company's profits, thus pay based on company performance. "line goes up" mechanics assume somebody will buy your stock because there's a shared illusion that stocks have value, even though they, in case of tech stock, don't pay dividends, and give no voting rights.

[vasco]

It is you who missed the point. Google the fiscal difference between dividends or no dividends and you'll understand. There's nothing preventing you from selling exactly as much % shares each quarter as you want to create your own dividend, specially with fractional shares. These days the difference is merely fiscal and people that say "if there's no dividends its all fake" seem to want to portray it as bad when for most people it's way better to let it compound and only sell and trigger taxable events when they want to. I don't see how the board of some company deciding when I have taxable events is an advantage if the company removes the same value of shares from circulation by doing a buyback.

Dividends are just adding financial inefficiency and removing choice from the shareholder.

[torlok]

Since you're still struggling, I'll try to be as clear as possible. Why does a stock have value if it doesn't give you a share of the company profits, or voting rights?

[vasco]

You're adding voting rights into the discussion when they are separate from dividends is something I don't understand. You can have voting rights and no dividend.

Regarding the share of the profits I already explained. You have your share of the profits in form of liquid stock that you can decide to sell. It's the same thing.

[Jolter]

Why would they not pay dividends?

[rerdavies]

So they can invest in themselves. The usual reason.

[michaelt]

> I think a better way would be to keep the foundation and spin off a company that manufactures all of that. Sell 49% of that company in an IPO and keep the majority stake in the foundation. This way they can raise money for expansion while keeping the mission in line.

Ah yes, the OpenAI approach :)

[szundi]

I’m not really sure you get what the smell of money does to most people