Warned Jackson, “Those companies are asking shareholders to trust management’s business judgment — not just for five years, or 10 years, or even 50 years. Forever.” Such perpetual dual-class ownership “asks them to trust that founder’s kids. And their kids’ kids. And their grandkid’s kids . . . It raises the prospect that control over our public companies, and ultimately of Main Street’s retirement savings, will be forever held by a small, elite group of corporate insiders — who will pass that power down to their heirs.”
Well is anyone forcing them to buy the stocks? This is a private matter for company owners and stockholders, we don't need regulations for this. If there is fraud or fake financials reporting then yeah the government comes in.
As a shareholder, what's the difference between 50 years and forever, anyway? Are you locked into the shares to the point where you're not even allowed to sell them? If not, what's the likelihood anyway that you would have kept them for the full 50 year duration?
As someone who is at least somewhat well-informed, I literally never heard this. How would you expect investors to know that? Wouldn't it be better to just live under a system of laws that prevents insanity like this? And then you could spend your time learning and being productive instead of poring over the details of how you're being duped in any given situation?
Plus, this insanity is removing power from investors. If they are not even going to look at the company share structure, what kind of decision were they going to make?
An investor should research the company they are investing in. If it's a public company there is a wealth of current and historical data. It takes time, but it's not hard.
This is basic stuff, right?
In the specific case of WeWork, even though it was a private company, there was a massive amount of information questioning its business model, the founder, and its corporate structure.
I have no stake in WeWork, and I barely care about them, but even I knew what they were about.
>Wouldn't it be better to just live under a system of laws that prevents insanity like this? And then you could spend your time learning and being productive instead of poring over the details of how you're being duped in any given situation?
NO!!! I'm flabbergasted someone would make such a statement. You have to take responsibility for your life. You can't just offload that responsibility on someone else. Just because a law is made, doesn't mean it's followed, doesn't mean there aren't loopholes, doesn't mean you're protected. Ask Bernie Madoff investors who lost their life savings even though there were laws and regulations that 'protected' them. You still have to do your own diligence. It's like crossing the street and getting hit by a car - does it matter if you had the right of way and the car broke the law if you're now disabled for life? You look both ways even when the light green before crossing the street.
I'm also not sure what a law to prohibit the children of founders from taking an active role in the operations of said company would even look like. How do you even begin to craft such a law?
And do you even want to? If a child of a founder was around a company from a young age learning how it is run, the culture, and the business - is it that bad if the board and shareholders decide this person, with a wealth of experience, would be chosen to run it? Maybe, or maybe not. This is why laws are a blunt instrument. A law could be made to prohibit this, but it would then prohibit all the cases where it would have been beneficial to the company.
> As someone who is at least somewhat well-informed, I literally never heard this. How would you expect investors to know that? Wouldn't it be better to just live under a system of laws that prevents insanity like this? And then you could spend your time learning and being productive instead of poring over the details of how you're being duped in any given situation?
There are already numerous laws around securities. That is no excuse for lack of due diligence. Would you buy a house without getting a title search?
>Wouldn't it be better to just live under a system of laws that prevents insanity like this?
Not in my opinion. Laws are hard to uninstall or to change once enacted, and they tend to have unintended consequences.
And investors aren't like widows or orphans in needing lots of regulatory and legal protections. (The most useful protections for investors are probably the ones that ensure that the relevant published information is actually true.)
You've never heard of dual-class shares? When you're an investor you have to read the prospectus, dude.
I don't want to prevent this. For some companies I want voting rights controlled. I don't want other people in my position telling Google how to run. The founders do a better job than the short-term shareholders. So let them have Class B. As a Class A, I prefer this.
Softbank should have known. They had billions of dollars invested. They don't get to act surprised that Neumann was borrowing money from banks and then having the company cover those loans.
Warned Jackson, “Those companies are asking shareholders to trust management’s business judgment — not just for five years, or 10 years, or even 50 years. Forever.” Such perpetual dual-class ownership “asks them to trust that founder’s kids. And their kids’ kids. And their grandkid’s kids . . . It raises the prospect that control over our public companies, and ultimately of Main Street’s retirement savings, will be forever held by a small, elite group of corporate insiders — who will pass that power down to their heirs.”