Is the long rally for tech stocks, like Elon Musk’s joint, going up in smoke? From Simon Black at sovereignman.com:
An insane event on March 2, 2017 likely signaled the top of the current market…
On that day, shares of Snap (SNAP), owner of the popular Snapchat app, went public at a valuation of more than $30 billion.
But it wasn’t the sky-high stock price that made this IPO special. Nor was it the fact that the company’s co-founders, 26-year old Evan Spiegel and 28-year old Bobby Murphy, became multi-billionaires overnight.
What made this IPO special was the fact that it was the first time in US market history that a company publicly offered shares with absolutely ZERO voting rights.
Snap clearly highlighted the fact in its pre-IPO documents… “to our knowledge, no other company has completed an initial public offering of non-voting stock on a U.S. stock exchange.”
Still, investors piled in, knowing they were buying nonvoting shares… essentially granting totalitarian control of the company to two kids.
