Professor Joo Comments for San Francisco Chronicle on Snap, Inc. IPO
Professor Thomas Joo commented for the San Francisco Chronicle on Snap, Inc., the company that makes the popular Snapchat photo app, and the regulatory questions posed by the poor performance of Snap’s stock following an IPO that brought in $3.4 billion from investors.
Snap stock has dropped 20 percent since its March IPO, with further declines expected as lock-up provisions preventing senior executives from selling expire. Meanwhile, investors who bought into the company’s triple-class stock structure have no say in the operation of the company, ceding all authority to CEO Evan Spiegel. Recently, S&P said it will no longer include companies with such stock in its indexes, the Chronicle reports.
“Snap made itself the poster child for nonvoting public stock,” said Joo. “I expect Snap’s poor showing will do more than the index policy to dissuade pre-IPO (corporations) from issuing multiple-class stock.”
Joo, Martin Luther King, Jr. Professor at UC Davis School of Law, specializes in the areas of corporate governance and race and the law.