It's about time to write off high-growth tech stocks, Goldman warned, saying software carries the highest multiples since the tech bubble.Marketsread more
Iran will surpass the internationally agreed levels of its low-enriched uranium levels in 10 days, the country's atomic energy body said Monday.Politicsread more
Boeing said the airline industry will need 44,040 new commercial airplanes by 2038. The market value of those planes would reach $6.8 trillion, up from $6.49 trillion...Airlinesread more
Apple is reportedly building three new iPhones for 2020, including two with 5G. It may also slightly change the screen sizes of the new iPhones.Technologyread more
Sotheby's announces it has signed an agreement to be acquired by BidFair USA, a venture owned by art collector Patrick Drahi.Marketsread more
Overall, extortion by email is growing significantly, according to the FBI's Internet Crime Compliant Center (IC3). Last year, these complaints rose 242% to 51,146 reported...Technologyread more
In a 7-2 ruling, over dissents from Justices Ruth Bader Ginsburg and Neil Gorsuch, the justices affirmed the so-called "dual sovereignty" exception to the Constitution's...Politicsread more
Target's nationwide cash register meltdown over the weekend created more than $16 million in buzz on the internet from news reports and other social media mentions, according...Retailread more
The chipmaker crush could persist and investors should be selective, but Nvidia looks like a clear buy, one market watcher says.Trading Nationread more
The top court scrapped a ruling from the Oregon Court of Appeals in favor of the same-sex couple. The owners of the bakery, which refused the make the cake due to religious...Politicsread more
Boeing reached a deal with British Airways to provide parts for some of its plane's made by rival manufacturer Airbus, part of Boeing's push to grow its services business.Airlinesread more
A trade group representing top U.S. pension funds and asset managers, including BlackRock and T. Rowe Price, will ask stock exchanges to limit how long companies may operate with unequal voting rights for shareholders.
The move is meant as a compromise to solve one of the trickiest issues in American corporate governance, said Ken Bertsch, director of the Council of Institutional Investors, based in Washington, D.C., which organized the effort.
Past calls to bar dual-class shares have gone nowhere even as the shareholding structures remain popular in initial public offerings of technology companies and have led to controversies at larger firms including Facebook.
Shares of this kind are widely held by big funds despite their concerns that the limited voting rights can lead to insular boards and poor corporate oversight.
Large investors "need to participate in the market, so they want a systemic solution" rather than foregoing shares of particular companies, Bertsch said.
Specifically the trade group will ask New York Stock Exchange parent, Intercontinental Exchange, and Nasdaq to require in their listing standards that companies seeking to go public using multiple share classes with unequal voting rights have plans to equalize them within seven years, according to letters seen by Reuters that the trade group plans to send on Wednesday.
Companies could extend the structures another seven years if authorized by shareholders, voting on an equal basis, under the trade group's proposal.
"Investors should be allowed to make an informed choice about investing in a company with a multi-class structure," Nelson Griggs, President of Nasdaq Stock Exchange, said in a statement. Eliminating the choice of using multiple share classes could lead companies to "stay private or sell themselves. Those outcomes preclude retail public investors from participating in the company's growth."
Intercontinental Exchange spokeswoman Lisette Kwong declined to comment.
In addition to the large asset managers, the Council's membership includes top state pension funds such as the California Public Employees' Retirement System and the Florida State Board of Administration which oversees retirement assets.
The Council has pressed for an end to dual-class systems in the past, and for action by regulators, to little effect so far. Stock index providers have taken a range of stances on the question of whether to include shares of companies with unequal rights.
The Council's latest effort accepts that some companies with unequal voting rights would continue that way.
Such companies would include cloud-storage provider Dropbox, Snapchat parent Snap, and meal-kit maker Blue Apron, which all have gone public since last year with little or no voting representation for certain investors.
In all the council said 19 percent of IPOs on U.S. exchanges last year had at least two classes of stock with different voting rights.
Some technology executives argue the unequal structures give business leaders more leeway to focus on long term goals rather than answer to short term Wall Street expectations.
Critics respond that the setups leave shareholders with little recourse when problems emerge, especially over the longer term.
The issue came to a head in May at Facebook, where a majority of outside investors backed a measure to revamp its voting structure amid concerns about how the company had handled content and privacy issues, but the vote had no impact given the majority control of voting rights by company founder and CEO Mark Zuckerberg.
In a statement provided by the Council, BlackRock co-founder and vice chairman Barbara Novick said that "BlackRock believes that equal voting rights are a fundamental tenet of good corporate governance."
Donna Anderson, head of corporate governance at T. Rowe Price, said in an interview there are signs that time limits for multiple share classes will catch on. She cited a growing number of IPOs with the feature and supportive comments about such limits from U.S. SEC commissioner Robert Jackson in February.
"We're in a potentially unique moment of consensus," she said.