Gustavo Ballvé on August 29th, 2011
Corporate Governance, Food for thought, Home, Industries, Investment Themes, Media, Portfolio Management, Signal or Noise, Tech

The social media IPOs have signaled a return of the dual-class structure: more voting power for the founders/ remaining investors (OK, Google also did it a few years ago). As someone comments in the article below, these high-flying companies do it because they can get away with it – they are in hyper-growth mode at a time of very little growth in the global economy. But Zynga, the “Web 3.0” game company, is reportedly coming up with a triple-class share structure that gives “innovation” a bad name. Recalling “buyer beware” has never been more important.

Groupon has also lit up the alert board with a “just for employees” memo by its CEO, Andrew Mason – conveniently leaked out immediately to the press – with very detailed accounts of how Groupon will silence its critics when it goes public. Yes, it includes financial numbers previously undisclosed. It’s pre-IPO marketing during the company’s quiet period, a very complicated issue the SEC will probably want to look into. Groupon is one of the most scrutinized companies in the planet right now, and there’s no way such a huge, juicy memo wouldn’t be leaked out.

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