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YOU CAN'T SELL YOUR FIRM AND OWN IT TOO: DISALLOWING DUAL-CLASS STOCK COMPANIES FROM LISTING ON THE SECURITIES EXCHANGES

University of Pennsylvania law review, 2014-05, Vol.162 (6), p.1495-1516 [Peer Reviewed Journal]

2014 University of Pennsylvania Law Review ;COPYRIGHT 2014 University of Pennsylvania, Law School ;ISSN: 0041-9907 ;EISSN: 1942-8537

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Title:
YOU CAN'T SELL YOUR FIRM AND OWN IT TOO: DISALLOWING DUAL-CLASS STOCK COMPANIES FROM LISTING ON THE SECURITIES EXCHANGES
Author: Wen, Tian
Subjects: Business structures ; Capitalization ; COMMENT ; Common stock ; COMPANIES ; Corporate governance ; Corporate structure ; Dual-class common stock ; Going public (Securities) ; Initial public offerings ; Investors ; Laws, regulations and rules ; Listings ; MANAGEMENT ; SECURITIES AND EXCHANGE ; Shareholders ; SHARES AND SHAREHOLDERS ; Stock exchanges ; Stock prices ; Stock shares ; Stock-exchange ; Stockholders ; United States. Securities and Exchange Commission ; Voting rights
Is Part Of: University of Pennsylvania law review, 2014-05, Vol.162 (6), p.1495-1516
Description: In 2004, Google's initial public offering (IPO) revealed that the company would go public with a dual-class capitalization structure. A dual-class stock company has a capital structure whereby insiders hold common stock with multiple votes per share (typically ten), while the public holds common stock with just one vote per share. This structure was popular in the 1980s as a defensive measure to ensure that a company was protected against hostile takeovers, management would adopt and keep high vote share classes. The NASDAQ Stock Market (NASDAQ) and NYSE MKT LLC have consistently allowed corporations with such structures to list on their exchanges, while the New York Stock Exchange (NYSE) has had different rules over time. In 1988, the Securities and Exchange Commission (SEC) came into the picture and attempted to regulate companies with dual-class stock (and other structures with shareholder voting restrictions) by prohibiting such companies from listing on the stock exchange. However, the Court of Appeals for the District of Columbia subsequently vacated this SEC rule. Today, corporations can list on the NYSE, NASDAQ, or AMEX as long as the dual-class structure was in place at the time of the initial public offering.
Publisher: Philadelphia: students of the University of Pennsylvania Law School
Language: English
Identifier: ISSN: 0041-9907
EISSN: 1942-8537
Source: Alma/SFX Local Collection

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YOU CAN'T SELL YOUR FIRM AND OWN IT TOO: DISALLOWING DUAL-CLASS STOCK COMPANIES FROM LISTING ON THE SECURITIES EXCHANGES

2014 University of Pennsylvania Law Review ;COPYRIGHT 2014 University of Pennsylvania, Law School ;ISSN: 0041-9907 ;EISSN: 1942-8537

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