Dual-Class Shares Unloved But Don’t Write Them Off Too Quickly
By and large, dual-class shares are unloved by investors and PF bloggers because the structure creates a double standard that gives one class of investors unfair voting power over another. ThickenMyWallet recently wrote a post on dual-class shares titled “You’re a fool if you buy…“:
The primary disadvantage of a company with a dual-class share structure is there are no effective checks and balances to management excesses such as excessive executive compensation… The larger issue is that companies with dual-class structures tend to be poorer performing stocks than their single-class structure counterparts (ask someone who invested in shares of Ford).
Yesterday, The Dividend Guy followed up with “Dual-class shares suck“:
From a statistical perspective, it would be better to hold the single-class stock in the industry you are looking at, compared to the dual-class company.
Both bloggers singled out controlling shareholder, Conrad Black, whose extravagant lifestyle single-handedly brought Hollinger […]
Original post by Financial Jungle Guy