Snap's IPO led to changes that barred the company and others like it from major stock indexes, but at least one index provider is dropping those limitations.
Snap Inc.’s initial public offering led to changes that barred the company and others like it from joining major stock indexes, but at least one major index provider has decided to drop those limitations after less than six years.
S&P Dow Jones Indices announced Monday afternoon that a 2017 rule barring companies with multiple share classes from joining indexes such as the S&P 500 SPX has been dropped. The move comes after the index manager consulted with “market participants” at the end of last year to discuss several potential changes to the policy.
Snap’s move was an acceleration of an approach used by a generation of Silicon Valley tech companies to ensure that founders retained control of their companies even while selling shares to the public. Companies such as Facebook parent Meta Platforms Inc. META and Google parent Alphabet Inc. GOOGL GOOG used similar structures that provided their leaders with special shares that included increased voting rights, which Snap took further by offering no voting rights.
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