[georgeburdell]

With the serious lapses in governance being made by founders with these special shares, such as Musk and Zuckerberg, I wonder if the shares without these special rights will be substantially discounted. What rights do these other shareholders retain that would keep them valuable? Rights to compensation in the case of bankruptcy?

[ballon_monkey]

Facebook would never have become what it is today if Zuck had lost control of the voting. It would have been sold 10 times over and prob not exist today. I suspect the same could be said for Mask and his businesses.

[ulfw]

Or maybe Facebook would still be a valuable destination and instagram still a great product for sharing photos instead of god knows what Zuckerberg has done to them now.

instagram being a cheap tiktok clone is frankly an insult.

[MASNeo]

Instagram is stealing my wife. Literally, the mental rot it inspires from echo chambers makes sensible human conversation sadly very hard.

[georgeburdell]

Facebook IPOd in 2012, after it was already used by hundreds of millions of people, and after it bought Instagram

[ballon_monkey]

When FB was private Zuck had 57% of class B voting right stock. He retained this on IPO. My point is, if he did not have control over voting, before/after IPO, FB/Meta would not be where it is today. He prevented Ads being on FB for many years operating at a loss to grow FB while shareholders complained wanting to shove Ads all over the place.

[te_chris]

“What it is today”.

Oh, glad we managed to not miss out on the 2-sided ai slop panopticon

[notfromhere]

You’re saying this as if that wouldn’t have been a positive outcome

[mensetmanusman]

The outcome would have been like phones were before the iPhone. NFL installed on every device.

[jdross]

These have become some of the most valuable companies on Earth. The idea that there are lapses in governance in these companies is insane. Any shareholder is buying in fully aware of the governance structure. Many because of it! Shareholders’ rights are clearly enumerated.

[janderson215]

I agree many buy because of the governance structure and founders retaining control, but there is a lot of dumb money out there.

From Claude via stockanalysis.com: META — institutions 67.51%, insiders 13.49%, float 2.19B of 2.54B shares outstanding. That leaves roughly 19% as retail/other.

SPCX — institutions 5.95%, insiders 46.47%, float only 638.65M of 13.17B shares. Residual is ~47.6%, but that is not retail.

[notfromhere]

The value of the company and lapses in governance have nothing to do with each other. One does not disprove the other

[NuclearPM]

> Any shareholder is buying in fully aware of the governance structure.

This is laughable. Many shareholders don’t even know they own stock in these companies.

[andsoitis]

That’s an indictment on them. You should know where you’re putting your money and why. If you delegate this to a professional or influencer, you do not get to blame them. After all, you could just buy something you think you understand better like real estate or keep it in cash.

[StilesCrisis]

You don't get much of a say in how your retirement fund is invested.

[kelnos]

How true is that these days? Sure, old-school pension funds are managed without any input from the future pensioners, but most 401ks (and similar) these days have a variety of investment options that the employee can choose from. Yes, there are some that have extremely limited options, but I'm not sure how common those are.

And once you've left the company and roll those 401ks over into IRAs, you can put them at whatever financial institution you want, many of which have more or less unlimited flexibility (within legality) with regard to what you can invest in.

Now, I know many employees just sort of adopt an "autopilot" attitude and don't pay much attention to their retirement account investments, but that's on them for ignoring this stuff. (The lack of general financial literacy, in the US at least, continues to disappoint me.)

So: yes, there are some people who don't have much of a say in how their retirement fund is invested, but my feeling is that those people are a small minority. I do think a large number (perhaps even a majority) of people do have the ability to direct their retirement investments, but either don't know they can do it, or can't be bothered. Again, though, that's on them for not educating themselves and playing a more active role in their financial future.

[Danox]

You can roll it over into such a plan when you’re still working for the company you’re at, but you have to take it upon yourself to do so they don’t volunteer that information. Most of the people in my design department didn’t bother to roll it over to such an account they just kept it in the original account.

[Danox]

You can, but you have to take it upon yourself most of investment companies handling such plans. Don’t like to volunteer that information.

[CamperBob2]

Exactly. If nothing else, you should know who you're supporting.

Many people wouldn't support SpaceX and Tesla if they knew more about Musk. Conversely, some other people who don't know much about him might want to support his companies.

[dragontamer]

The typical "investor" is an ETF these days.

Your standard SPY or VTI investor doesn't know jack diddly squat about shareholder rights, nor do they ever plan to invoke them.

[kelnos]

Willful ignorance is not an excuse. If you buy into an ETF, you are delegating responsibility to the people who run the ETF (or the people who maintain the index that the ETF tracks), and you've decided you're ok with that, and are ok with whatever companies are in the index/ETF.

You can always decide to pick an ETF that doesn't invest in the companies you don't like, or invest in individual stocks if you have the time and stomach for it.

[dragontamer]

I'm not saying I like this turn of events.

I'm saying it's how the world works. The majority of pension funds (public or private) and 401k plans are simply passive index funds with nearly no direct voting rights (and at best very limited, indirect voting rights).

[andsoitis]

> The majority of pension funds (public or private) and 401k plans are simply passive index funds

That’s completely wrong.

Most 401k plans have by far more active fund options than passive fund options. Notwithstanding, more and more dollars are tilting towards the passive index funds, i.e. through consumer choice.

Where do you get your information from?

[dragontamer]

You do realize that passive funds have more money than active funds today, right?

https://finance.yahoo.com/news/passive-etfs-hit-tipping-poin...

Sometime last year, passive funds overtook active funds.

[DaedalusII]

you should have a look at proxy firms. you would be surprised

[dragontamer]

Could you explain to me how an investor owning SPY shares gets to control the proxy vote?

Oh, don't worry. I already know the answer. I'm asking if YOU can tell me the answer.

[mpalczewski]

You can buy IVV instead and get the same exposure but this time you get to vote. Or you could just not own spy and buy the shares individually.

[dragontamer]

What 401k program do you or your peers have that allows you to buy funds outside of the few, selected by the 401k manager?

I certainly can't buy individual shares in my 401k program. And very, very few programs I'm aware of ever offered that as an option.

[DaedalusII]

that what i mean. where do all those votes go? someone controls them. and those interests are bought and paid for

[dragontamer]

In practice?

To Elon Musk and Mark Zuckerberg. Who have crafted companies who have virtually no voting rights but get purchased up by the masses through passive index funds.

[dgellow]

In the case of Spacex that's literally not the case, when private investors bought shares the company was already a decade old and had a single class of shares. It's only since the IPO that the company switched to a dual structure, multiple years after private investors bought in. And class-B shares have only been given to Elon and a few of his friends.

[miohtama]

The private investors were free to sue or arbitrage, as it is a private matter.

There were disputes around SpaceX secondary market/special purpose vehicle shares before the listing, but they were all settled out of court, AFAIK.

[timmmmmmay]

SpaceX has had multiple share classes the entire time, what are you talking about? pre-IPO there was a third Class C with no voting rights at all, these got converted to Class A

[dgellow]

Do you have any source on this? That doesn’t match what I can find

[inemesitaffia]

This is well known stuff.

Look for articles about SpaceX ownership pre 2024

Here's an article from 2023

https://www.euronews.com/business/2023/09/06/did-elon-musk-l...

It's worth asking you where you conceived this claim and what happens with the similar ones

[panarky]

Generally the 10x shares aren't traded so it's impossible to see if they trade at a premium.

One exception is GOOG / GOOGL which both trade actively, and there's not much difference in price.

The mechanism for a price divergence could be accumulation of the 10x shares to seize control, but even if you could buy the entire float, it wouldn't be enough to take control, so that mechanism never happens.

[Polizeiposaune]

There are three classes of Google stock.

By voting rights, they have 10x (founder stock), 1x (trading as GOOGL), and 0x (trading as GOOG). The class with 10x voting rights does not trade publicly. The class with 1x voting rights does not have enough voting power to control the direction of the company so there is no real difference in perceived value between GOOG and GOOGL.

Employee stock awards are IIRC all in restricted shares of GOOG (0x voting rights) so they don't dilute the power of the founders.

[panarky]

You are correct.

Interestingly, the 10x shares held by Brin and Page constitute only 11% of the economic value of Alphabet, but 51% of the voting control.

And the 10x shares automatically convert to 1x shares upon transfer or inheritance, so if the founders cash out or die, the 10x supervoting power disappears.

[pyuser583]

Oh wow so that lets them honestly say they have the same value as other shares?

[decimalenough]

Yes. And as far as any future owners are concerned, that's perfectly true.

[chii]

> I wonder if the shares without these special rights will be substantially discounted

it should be, but the market might be a bit irrational.

[edoceo]

No rights to compensation on bankruptcy. Payroll is first, then debt, taxes and stuff. Equity holders ride down to zero.

[dzonga]

zuck for all his fault - he ain't a scammer or wannabe scammer.

he might have a large miss with the metaverse, & maybe current a.i effort. but in terms of being ruthless with competition & acquiring competition he did his job well as CEO.

musky on the other hand - overpromising and underdelivering.

[dd8601fn]

There sure is a lot of that with Musk, but there’s also a lot more “delivering” than most companies ever achieve.

[dgellow]

At this point it’s not over promising, he’s knowingly lying to investors