Should You Worry About Snap? Academic Evidence
- Snapchat is managed through dual-class shares that provide control power to the management.
- Academic evidence shows that dual-class shares can lead to agency problems and may be detrimental to company’s operations and performance.
- However, examples from Google and Facebook show that they can also be beneficial.
- Overall, these structures can benefit investors if they fully believe in the founders, but that is not the case for most dual-class companies.
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