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New tech IPOs give disproportionate voting control to CEOs

Dan Primack, author of Pro Rata

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

Barak Ravid, author of from Tel Aviv
5 hours ago - World

Maximum pressure campaign escalates with Fakhrizadeh killing

Photo: Fars News Agency via AP

The assassination of Mohsen Fakhrizadeh, the architect of Iran’s military nuclear program, is a new height in the maximum pressure campaign led by the Trump administration and the Netanyahu government against Iran.

Why it matters: It exceeds the capture of the Iranian nuclear archives by the Mossad, and the sabotage in the advanced centrifuge facility in Natanz.

Go deeper (1 min. read)Arrow
Hans Nichols, Jonathan Swan
6 hours ago - Politics & Policy

Scoop: Biden weighs retired General Lloyd Austin for Pentagon chief

Lloyd Austin testifying before Congress in 2015. Photo: Chip Somodevilla/Getty Images

Joe Biden is considering retired four-star General Lloyd Austin as his nominee for defense secretary, adding him to a shortlist that includes Jeh Johnson, Tammy Duckworth and Michele Flournoy, two sources with direct knowledge of the decision-making tell Axios.

Why it matters: A nominee for Pentagon chief was noticeably absent when the president-elect rolled out his national security team Tuesday. Flournoy had been widely seen as the likely pick, but Axios is told other factors — race, experience, Biden's comfort level — have come into play.

Go deeper (1 min. read)Arrow
Axios
Updated 7 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. World: Thailand, Philippines sign deal with AstraZeneca for vaccine.
  4. Economy: Safety nets to disappear in December — Black Friday shopping across the U.S., in photos — Amazon hires 1,400 workers a day throughout pandemic.
  5. Education: National standardized tests delayed until 2022.
Go deeper (1 min. read)Arrow

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