This is a very strange decision that the SEC has decided to investigate Snapchat Inc. for.
However, since the IPO has already occurred, this article's speculation that mutual fund buyers en masse would reject the idea of losing voting rights, was completely wrong. The stock closed at $24.48 per share and the article called even $17 an over-valuation.
I'm of the opinion that SNAP is worth closer to nothing and that this is a huge bubble. Only 67% of business accounts even posted in October of 2017 following a decreasing trend. Since SNAP needs to make money from advertisers, as they don't charge users, you need business accounts to be active.
But I'm not stock genius or anything. And a lot of smart and experienced people don't agree with me.
Well it used to be that you were buying a voice in the company (nominally admittedly) and a right to profits through regular dividends. But now companies don't regularly declare dividends as often, and now you're not even getting a vote. So all you get is the appreciation of the stock, should it in fact appreciate. It's a brave new world of investing. It's also interesting to note that an exclusive group of people were able to buy class B and C shares which gave them the ability to have 1 and 10 voting shares respectively. Just not you and me. More importantly, the founder and his partner retained 88%-ish of the control of the company. Since they've been unable to do anything to correct cash flow at this point, we'll see how that works out. We're just expected to give them money with no control over it. Or not, like you said.
The hits keep coming I just don't get why anyone would buy this who wasn't intending to sell it immediately. It is completely overvalued, has never turned a profit, and doesn't look like it will in the future. I'll say it. SNAP will not be a company within five years.