Quantum Media: Industry News

SELECTED ITEMS OF INTEREST TO THE MEDIA COMMUNITY

Quantum Media: Industry News

SELECTED ITEMS OF INTEREST TO THE MEDIA COMMUNITY

Quantum Media

http://www.quantummedia.com/industry-news/snap-ipo-keeps-co-founders-firmly-in-control | Printed on: November 22, 2017

Industry News

Snap IPO Keeps Co-Founders Firmly In Control

January 19, 2017

Media company founders want your money, but not your opinion. Snap is planning to give public shareholders zero votes for their investment in Snap. In a recent story in the WSJ, the author explains, “Like many technology entrepreneurs, the founders of Snap Inc. want to retain management control of the messaging-app company, even as they sell shares to the public. In one respect, the men are going further than tech firms typically do: Investors won’t get any voting power with shares purchased in Snap’s initial public offering, according to people familiar with the matter…. The two [founders] are expected to hold more than 70% of the voting power despite owning roughly 45% of the stock….”

Analysts say that Snap founders can do this because of supply and demand. “‘“If you’re the only supply in the market, you’re well positioned to dictate the terms,’” said one in the WSJ article. But Snap’s bankers are trying to be a bit more artful in their explanation; they say it is worth it because co-founder Evan Spiegel is a “visionary” and deserves the control. Uh-oh—that usually is a license for management abusing their position—and we know how that movie ends. For the full story go here.

 

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