Here's a pitch you can't turn down. Someone starts a company. They say that they'll have 15 shares of the stock for sale. They'll keep five of the shares, and anyone else who wants to buy into their next great idea can purchase the other ten shares. So five new people purchase the other ten shares.
But there's a catch. The five shares the owner has are A-Shares of company stock, and the ten shares owned by the other five people are B-shares of the stock.
A-Shares get three votes each during company meetings.
B-Shares receive two votes during the meeting.
So the owner now has 50% of the company's assets, but 60% of the voting rights. And the other five people have 50% of the company assets, but 40% of the voting rights.
The A-Shares are an example of control stock, which provides a certain class of investor greater influence in the company than others. The structure is commonly done to ensure that CEOs and founders maintain influence over their companies.
This trend has been popular among technology companies. Facebook and Google both have different classes of stock that ensure their founders maintain totalitarian control of the company...while throwing a few bucks down to the pleb shareholders now and then.
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Finance: What is Control Value?15 Views
Finance allah shmoop what is control value dance on a
fifty shades thing Well there's a partnership a semi evil
one there was once a tv siri's It was exorbitantly
expensive to produce but everyone wanted to make it So
it ended up being made not by one studio but
by three viacom paramount disney and then news corp fox
Before it was disney news corp fox well each of
the three partners put in a third of the money
and split all the money distributions equally The problem on
the show ended up being hugely successful when it ran
for the first time on network tv so that was
great but now it's in reruns and because all three
competitors generally hate each other he's financially if their job
too none are willing to run the show a lot
on their cable network or broadcast network because then they
generate revenues for their hated competitors so they don't run
the tv series even though people want to see it
And this is a big fat bummer to the actors
writers and producers of the show who were banking on
rerun royalties to pay for their divorces if one of
the studios owned the siri's I'ii controlled it let's call
that siri's sunlight ing well then the siri's would heir
a ton more and presumably generate a ton more desperately
needed revenues What do you think divorce lawyers work for
free Well the control value of owning that asset then
is huge because if it were owned by one player
well then that player could run it again and again
and again and again on their network like think big
bang on tbs and then monetize that asset and massively
so there's Incremental control value with the well controlling a
property And yet it's not to be confused with remote
control value which is about a buck twenty five on 00:01:51.209 --> [endTime] ebay
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