Among them, A shares have one vote per share and can be circulated normally in the market; B shares are super voting shares with multiple votes per share (usually 2-20 voting rights per share) and cannot be transferred at will. If you transfer, you must give up voting.
Privileges are first converted into common voting stock, which is typically held by the management team.
It should be noted that AB shares have the same right to dividends.
The emergence of dual-class equity capital structures allows company founders or management teams to control the company with a minority share.
For them, this shareholding structure can achieve the dual purposes of expanding financing without losing control.
In addition, for many investors, they only care about the returns on stocks and do not care about the company's decision-making power.
In this case, the dual-class share structure was implemented and accepted by the market.
Extended information: Problems with the dual-class shareholding structure of "same shares with different rights": Under the dual-class shareholding structure, it means that the management team holding a minority of shares has control, and the original internal control of managers under the shareholding system
The regulatory mechanism will be ineffective to a large extent.
In this case, when the management team takes actions that harm the interests of public investors, it is difficult to curb them through internal mechanisms.
Many times, companies with dual-class share structures require external judicial authorities and regulatory authorities to supervise and provide relief to public investors when problems arise.
In other words, opening up the listing of companies with dual-class share structures places very high demands on the local judicial system and regulatory mechanisms.