How is it legal to have different share classes? You could make 100 shares that can vote and then sell 99.9% of the company while maintaining full control. Seems strongly against the spirit of a publicly traded company
replyMost large companies do that these days: GOOG, META all have different share classes. Even the small startup I worked for had that.
replyMusk didn’t invent the idea of using multiple share classes to ensure the founder(s) retain control of the company, see Rupert Murdoch, Google, Facebook, etc
replyFrom the regulators’ perspective: it is a risk, but you disclosed that risk in the prospectus that buyers are assumed to have read (what percentage ever actually do?), hence it is fine
Well, when you buy into an IPO, they make you sign to say you read it. So either you did, or you made a false statement on a legal document
Who has the gold makes the rules
replyI suppose they kind of do, they could sell the stock and drive the price down. That wouldn't force Musk to change direction, but it would hurt his wealth.
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