alt Hacker NewsHow 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
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Most large companies do that these days: GOOG, META all have different share classes. Even the small startup I worked for had that.
Musk 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
From 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
There's some companies (Snap being one of them) where certain classes of shares have NO voting rights. If you think SpaceX is lopsided, look at Snap's shares. They have A, B, and C class. The founders of Snap own 95% of the voting through their Class C shares... literally only pre-IPO folks have any voting rights.