George Orwell wrote in Animal Farm, “All animals are equal, but some animals are more equal than others.” The same can be said about shareholders in a public company.
The way we find out who is more equal—or has more power over others—can be found in how organizations classify their stock, which falls under the category of complex capital structure.
Classified shares exist when a firm designates its stock into more than one class of common shares. In most situations, we'll see Class A and Class B shares of stock. In the case of Snap (the owner of Snapchat), common shares traded on public exchanges are C shares.
Each class of stock has different benefits, including the right to more votes and different yields.
CEOs of tech companies like Facebook, Alphabet, and Snapchat have moved to maintain control of A Class shares with significant voting rights as a way to defend themselves from takeovers or shareholders ousting them from their positions.
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Finance: What is a primary offering, and...28 Views
finance a la shmoop what is a primary offering and what are primary shares all
right people let's start with the primary offering it's pretty much just
an IPO or initial public offering of stock that's primary and hello 1933 Act [The 1933 securites act is slid onto a desk]
that's what gave rise to all the regulations around primary offerings its
original shares virgin ones in fact now being offered for the first time to an [Someone holding 'extra virgin stock']
investor public primary offering that's what it is
but primary shares also come from private companies like a venture capital [Sign for a venture capital company]
company might buy primary shares in a b round from whatever.com as that company
funds its growth now once a company is already public its shares will have
traded back and forth in many different hands over time those would be called [Secondary shares stamp]
secondary shares and hello 1934 Act which set the regs all around
secondaries so yeah primary 1933 secondary 1934 and well that's pretty
much it as long as you can count to two this one's a pretty easy concept to
would wrap your head around.. primarily.. [Woman looks confused]
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