In the event a company has both voting and non-voting classes of stock, there may be an observed (or inferred) price difference between the two – the generally understood concept of “greater value for greater rights” would lead us to assume such would usually be in favor of the voting stock. However, when substantial numbers of both voting and non-voting shares are outstanding, one vote owned by a marginal investor outside the control group is likely not enough to impact corporate decisions. Further, commonly-used methods to measure empirical price differences among listed securities and/or transactions may not adequately express the relevant differential. This panel will discuss our recent research and findings on this topic as regards the relative values of voting, non-voting, and super-voting shares.
Session covers Houlihan Lokey’s recent research and filings regarding the potential premia/discounts based on historical studies and more detailed and nuanced analyses.
Specific areas of discussion include:
Other factors which may impact price
Analytical frameworks to screen for comparable datapoints
Interpretation of the outputs
Categorize dual-class stock structures as voting/non-voting or one vote/many votes
Interpret public company pricing data to identify appropriate price differentials
Assess observed price differences to formulate discounts