Analysis

Snap's Expected No-Vote Shares Likely To Remain An Outlier

Law360, New York (January 30, 2017, 8:22 PM EST) -- Snap Inc.'s anticipated plans to sell solely nonvoting shares to the public through its initial public offering represents an extreme departure from current multiclass stock arrangements — and could cause the social media giant public relations headaches — but capital markets attorneys don't expect a wave of followers.

U.S. Securities and Exchange Commission and stock exchange rules allow issuers to sell nonvoting shares as a way to allow founders to retain outsized control of their company, though such stock is rarely issued and typically only after an IPO. Doing so also invites the risk that investors will punish the stock and...

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