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More U.S. Tech Companies are Adopting Unequal Dual-Class Voting Structures

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2 months ago

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Dual-class voting

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The Briefing

  • Dual-class structures give executives greater voting rights over public shareholders
  • U.S. tech companies have increasingly adopted this structure since the mid 2010s

 

More U.S. Tech Companies are Adopting Unequal Voting Structures

Shareholders of public companies often receive the right to vote on corporate policies like issuing dividends or initiating mergers.

Some companies opt for a dual-class share structure, where one class is offered to the public, and another is reserved for founders and executives. Many argue that this weakens accountability, as executives can simply overrule the wishes of outside investors.

The following table lists the number of U.S. companies that have IPO’d with a dual-class share structure. This data was compiled by Jay R. Ritter, Cordell Professor of Finance at the University of Florida.

YearNon-tech IPOs% of Dual Class
(non-tech)		Tech IPOs% of Dual Class
(tech)
1980492%220%
19811203%723%
1982350%420%
19832781%1732%
19841214%504%
19851494%373%
19863167%774%
198722610%592%
19887710%2814%
1989816%353%
19907812%320%
19912158%719%
19922976%1154%
19933838%1272%
19942879%1156%
19952579%2054%
199640111%2765%
199730013%1746%
199817012%1137%
199910618%3706%
20001206%2607%
20015711%239%
20024624%205%
20034511%186%
20041128%615%
200511511%4520%
20061099%482%
20078316%767%
20081520%60%
20092711%1414%
20105812%336%
20114518%3614%
20125317%4015%
201311320%4511%
201415312%536%
20158010%3837%
2016547%2124%
20177622%3043%
20189514%3936%
20197516%3735%
202012011%4542%
202119324%11847%
20223216%650%

Includes IPOs on the NYSE American, NYSE, and Nasdaq Stock Market with an offer price of at least $5.00.

The biggest takeaway from this dataset is that dual-class structures have become much more prevalent among U.S. tech firms. Starting in the mid 2010s, this trend includes noteworthy IPOs such as Facebook (2012), Square (2015), Pinterest (2019), and Coinbase (2021).

In the case of Coinbase, a separate class of shares reserved for founders and insiders has 20 times the voting power of regular, publicly available shares. According to Fast Company, this gives insiders 53.5% of the overall votes.

How do Dual-Class Share Structures Impact Performance?

Ritter’s report also analyzed the three-year returns on 9,089 IPOs from 1980 to 2021. Once again, this only includes IPOs on the NYSE American, NYSE, and Nasdaq Stock Market with an offer price of at least $5.00.

Returns were calculated through the end of December 2021.

CategoryShare structure# of IPOs3-Yr Buy-and-hold ReturnMarket-adjusted Return
TechDual-class29541.0%20.0%
TechSingle3,00919.6%-14.6%
Non-techDual-class58424.1%-12.7%
Non-techSingle5,20117.9%-23.9%

In both categories (tech or non-tech), IPOs with dual-class voting structures outperformed over the three year period. This outperformance was significantly higher for tech companies.

Where does this data come from?

Source: University of Florida (2023)

Data note: Buy-and-hold returns are calculated from the first close until the earlier of the three-year anniversary or the delisting date (the end December of 2022 for IPOs from 2020 and 2021). Market-adjusted returns are the difference between the asset’s return and the index’s return. The index in this case is the CRSP value-weighted index, which includes NYSE American, NYSE, and Nasdaq stocks.

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The 10 Longest Range EVs for 2023

This infographic lists 10 of the longest range EVs currently for sale in the U.S. in 2023. The Lucid Air takes first place at 516 miles.

Published

2 days ago

on

June 7, 2023

By

The Briefing

  • EV models with over 300 miles (480 km) of range are becoming more common in the United States
  • The Lucid Air (Grand Touring trim) has the highest EPA range at 516 miles (830 km)

The 10 Longest Range EVs for 2023

Range anxiety is frequently cited as one of the biggest turnoffs of electric vehicles (EVs).

Even as recent as 2021, the average range of an EV was just 217 miles (349 km), falling significantly short from the average gas car’s range of 413 miles (665 km). Thankfully, as this infographic shows, EVs with over 300 miles of range are becoming more common.

Below are the top 10 EVs for 2023, ranked by their EPA combined driving range. For further context, we’ve also included price. These values are for the specific trim that achieves the stated range. In some cases, more expensive trims are available but have a lower range (e.g. Tesla Plaid).

ModelEPA Combined Driving RangePrice*
Lucid Air516 mi (830 km)$138,000
Tesla Model S405 mi (652 km)$84,990
Hyundai Ioniq 6361 mi (581 km)$45,500
Tesla Model 3358 mi (576 km)$55,990
Mercedes-Benz EQS350 mi (563 km)$104,400
Tesla Model X348 mi (560 km)$94,990
Tesla Model Y330 mi (531 km)$52,990
GMC Hummer EV Pickup329 mi (529 km)$110,295
Rivian R1T328 mi (528 km)$74,800
BMW iX324 mi (521 km)$87,100

*Most recent prices available as of April 2023

Note that the EV market is rapidly evolving, and the data in this table has a limited shelf life. For example, Rivian is releasing a battery option dubbed the “Max pack” which promises up to 400 miles, but is not yet EPA rated.

Where Does This Data Come From?

Source: Car and Driver (range), manufacturer websites (price)

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