They're great for investment bankers and sellers, but lower valuation multiples are associated with greater shareholder return.
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On March 1, 2017, Snap Inc. priced its highly anticipated initial public offering (IPO), marking the largest U.S. tech IPO since Facebook went public in 2012. What made the Snap IPO particularly noteworthy was its dual-class share structure, featuring shares of common stock with no voting rights. The Snap IPO has brought to light the topic of dual-share structured companies and may leave other companies planning to go public wondering whether a dual-class share structure is right for them.
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Although there has been some public criticism of the use of soliciting dealer fees, particularly in the case of contested director elections, they do not violate securities laws, and, the ASC declined to exercise its public interest jurisdiction to prohibit or reprimand the practice. This decision confirms that a commission will be cautious in wielding its public interest jurisdiction when there has been no breach of securities laws; that it will only act where the transaction is "clearly abusive"; and that it will not be spurred into action based on mere speculation or unsupported inferences, requiring instead, proof of actual or potential harm.
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Shareholders are looking to take an increasingly active role in governance. Whether or not they have a literal seat at the table, they are getting closer to the boardroom than ever before. Boards of directors will have to take notice and change their practices to respond.
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The planned takeover of Quebec-based Tembec Inc. by Florida-based Rayonier Advanced Materials has become highly contentious, in part because of the strong opposition of Oaktree Capital Management, Tembec's largest shareholder.
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Short-term corporate behavior is a major problem in the 21st century firm. Too many companies prioritize quarterly earnings over long-term innovation, human capital investment, and brand development, and many people believe short-term shareholders are to blame.
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What are the next steps for IROs once they reach the top of the IR ladder? We hear from General Electric's former Head of IR about how he progressed to various CFO and CEO positions.
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