Age of the Imperial CEO: Dual-Class Shares Spread Across Big Tech

what happened

According to the Wall Street Journal, public IPO filings from Anthropic, which could become the biggest listing on record, show that its seven founders will hold voting power far out of proportion to what outside investors get. Those terms effectively decide who makes the key calls.

The same setup already exists elsewhere. SpaceX, listed in June, gave Elon Musk near-total control through a two-class share structure. Meta's board, meanwhile, created nonvoting shares so Mark Zuckerberg can keep command. The motive ties to a possible California tax on billionaires, which voters may approve on November 3. Without the change, Zuckerberg's voting stake could drop from 60.6% to roughly 53%.

Snap offers the opposite picture. CEO Evan Spiegel controls 53.1% of votes and has for years pushed smartglasses despite weak consumer demand. Shares are down almost 70% since the 2017 IPO, and an activist's call to spin off or shut that business has had no visible effect. After Snap listed, S&P Dow Jones Indices stopped adding companies with several share classes, but it reversed that restriction in 2023.

why it matters

For markets, the concern is that investors carry the risk of big bets without a real voice in them. Inclusion in the S&P 500 usually lifts demand for a stock, so the 2023 reversal gives multi-class companies a route to passive fund money.

market impact

Meta, SpaceX and future Anthropic shares: minority holders get less say over strategy and risk

tags

instruments