May 2, 2019

New tech IPOs give disproportionate voting control to CEOs

Pinterest execs during the company's IPO. Photo: Johannes Eisele.

Public market investors continue to grumble over how many big new tech IPOs are designed with dual-class structures that give disproportionate voting control to founder/CEOs.

Details: Recent examples include Lyft, Pinterest, Zoom Video and Slack. Uber is using a single-class structure, in part because its founder/CEO is now its founder/ex-CEO.

The move bans such issuers from the S&P 500 and many index funds (some just underweight them), but it continues to be viewed as a worthwhile tradeoff by founders who are terrified of being the subject of a Carl Icahn letter.

  • Founders are right to be guard against short-term investors who don't really care about the company, its customers or its employees.
  • Founders are wrong to respond through a structure that offers virtually no recourse when the founder is harming the company, its customers or its employees.

Go deeper

White House recommends Americans wear masks in public

New Yorker wearing a homemade face covering. Photo: Selcuk Acar/NurPhoto via Getty Images

The White House announced that the CDC is recommending Americans wear cloth masks or face coverings in public to help stop the spread of the coronavirus, President Trump said at a press briefing on Friday — emphasizing the guidance is "voluntary."

Why it matters: The use of face coverings could stop people who have the virus, whether they have symptoms or not, from spreading it further when they go out in public.

Trump calls to fill up more places with oil

President Trump is calling on the Energy Department to find more places to store oil, in the wake of rock-bottom prices and an ensuing economic collapse of the sector itself.

Driving the news: Trump’s comments came Friday during a televised portion of a meeting he hosted with industry CEOs to discuss ways to help the sector. It’s reeling from a historic drop-off in demand with the world shutting down to slow the spread of the coronavirus.

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 4:30 p.m. ET: 1,083,084 — Total deaths: 58,243 — Total recoveries: 225,422Map.
  2. U.S.: Total confirmed cases as of 4:30 p.m. ET: 266,671 — Total deaths: 6,921 — Total recoveries: 9,445Map.
  3. 2020 latest: Wisconsin governor calls for last-minute primary election delay.
  4. Oil latest: The amount of gasoline American drivers are consuming dropped to levels not seen in more than 25 years, government data shows.
  5. Business updates: America's small business bailout is off to a bad start.
  6. U.S.S. Theodore Roosevelt: Senators call for independent investigation into firing of Navy captain.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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