Of all the things to be upset about these days, shareholders not being able to vote for who is on the board of Snap and companies like it has got to be low on the list.
And yet, people have to be upset about something. Former Vanguard CEO John Brennan recently said regulators should look at the issue of companies issuing shares without voting rights, as Snap did last week. On Thursday, regulators at the Securities and Exchange Commission did just that. Its Investor Advisory Committee convened in Washington to discuss the topic. Commission Kara Stein said: “Unequal voting rights present complex and new issues that need to be understood and addressed,” according to Reuters.
I’m not buying what these critics are selling. The argument is that voting-rights schemes that keep the founders in control to the disadvantage of newer owners are unfair. Google famously gave its two founders and early CEO shares with “super” voting rights. This meant that they could control the company without owning a majority of the stock. Google did not invent this maneuver, by the way, but it did popularize it in Silicon Valley. (Steve Jobs said he wished he had thought of it when he co-founded Apple.) Snap took matters a step further by giving new shareholders no voting rights.
My beef is that while this isn’t good governance—it’s not—there’s nothing unfair about it. Investors don’t need to be “protected” from greedy founders, who likely will use their control to make decisions for the long term. The reason they don’t need protection is that no one is forcing them to own the shares. If you don’t like Evan Spiegel and Bobby Murphy’s governance techniques, don’t own their company.
For what it’s worth, unequal voting rights don’t mean a company won’t listen to shareholders. It turns out that founders would prefer their valuations be higher rather than lower. Witness Google’s willingness to hire a chief financial officer to clean house and to show investors the power of the Google business and the containment of its “other bets.”
In investing there’s no need to man the barricades. Just don’t buy the stock.
BITS AND BYTES
Google wants to compete with Slack, too. With the latest update to its Hangouts conferencing service, the tech giant is creating a separate version for messaging—an offering that competes more squarely with Slack’s platform. Microsoft also wants a bigger piece of this market, with its Teams app debuting commercially on March 14. (Fortune)
Don’t expect Airbnb to go public anytime soon. The home-sharing company’s latest $1 billion infusion gives it more “operational flexibility” to stay private—although CEO Brian Chesky is looking for more outside advice from “hosts” of its property listings. The round, which opened last summer, values the company at around $30 billion. (Fortune, New York Times)
These new Cadillac sedans can tell you what’s around the next corner. The automaker is equipping its CTS series with vehicle-to-vehicle communication technology that senses potential traffic and road hazards and beams that information to other nearby cars on the road. (Fortune)
Smart glasses aren’t dead yet. Despite the underwhelming reception for Google Glass, traditional eyewear companies are still actively exploring potential markets for glasses that can augment reality by collecting data or superimposing images onto a real-world point of view. Keep your eyes peeled for progress from recently merged European giants Luxottica and Essilor, which are prioritizing this area. (Wall Street Journal)
Bitcoin may go boom. The Securities and Exchange Commission is considering a proposal that would allow the digital currency to be traded like common stock. The decision, due by Friday, could throw open the door to a flood of new capital. (Fortune)
Time will tell if watch companies can stave off Apple Watch. Meanwhile, more of them—like Movado—are partnering with Google to use its Android operating system as the foundation for their own smartwatches. (Fortune)
Are you willing to pay $5,000 for a digital whiteboard? That’s the price for Google’s forthcoming Jamboard, due out in May, plus you’ll need to pay a $600 annual service fee. Microsoft’s same-sized rival product, Surface Hub, starts around $8,000. (Fortune)
The latest victim of Uber’s disruption may be itself. The company’s latest misstep is a dodgy program, dubbed Greyball, with which Uber actively prevented officials in cities that resisted its operation from hailing rides—one in a string of recent controversies that has called into question Uber’s aggressive business practices.
Since its founding in 2009, Uber has led a vast economic and regulatory disruption in the U.S. and abroad, unlocking the value of people’s untapped automotive resources while making more than a few enemies along the way. But the present spate of problems has the world’s highest valued private company—it’s appraised at nearly $70 billion—rethinking its combative approach. Fortune‘s Robert Hackett analyzes the implications.
PEOPLE AND CULTURE
Here’s a cheat sheet to who’s in charge at Twitter. If you are having trouble keeping track of which senior executives have joined or left since Jack Dorsey took control again, this list will reorient you. (Recode)
IN CASE YOU MISSED IT
Why a Short-Selling Pro Would Hold Onto His Snapchat Shares, by Lucinda Shen
Here’s Why This Analyst Thinks Snap’s Stock Won’t Crater, by Mathew Ingram
T-Mobile Just Improved Its Unlimited Data Plan Again, by Aaron Pressman
Most Federal Government Web Sites Don’t Meet ‘Basic Standards’, by Julia Zorthian
You Can Visit the International Space Station in Virtual Reality, by Jonathan Vanian
ONE MORE THING
Keep your castle safe. With these five new home security gadgets. (Fortune)
MARK YOUR CALENDAR
CIO Leadership Forum (East): Strategy in the age of digital disruption. (March 19-21; Hollywood, Fla.)
IBM Interconnect: Tap into advanced cloud technology. (March 19-23; Las Vegas)
Enterprise Data World: Become a data-driven business. (April 2-7; Atlanta)
AppianWorld: Accelerate your digital business transformation. (April 3-5; San Francisco)
Magento Imagine: Strategies and technologies for digital commerce. (April 3-5; Las Vegas)
Open Networking Summit: The future of open source communications. (April 7-9; Santa Clara, Calif.)
MuleSoft Connect: Connect apps, data and devices. (April 18-20; San Francisco)
Marketing Nation Summit: Marketo’s annual event for digital marketers. (April 23-26; San Francisco)
JiveWorld: Strategies and technologies for workplace collaboration. (May 1-3; Las Vegas)
Apttus Accelerate: Perspectives on automating the “quote-to-cash” process. (May 2-4; San Francisco)
Collision: A tech conference created by the organizers of Europe’s Web Summit. (May 2-4; New Orleans)
Knowledge17: ServiceNow’s annual customer gathering. (May 7-11; Orlando, Fla.)
Gartner IT Operations Strategies & Solutions Summit: How to accommodate cloud services and other “digital” technologies. (May 8-10; Orlando, Fla.)
Gartner Digital Marketing Conference: Actionable advice about martech. (May 10-12: San Diego)
Outperform: The PROS annual conference about omnichannel commerce technology. (May 10-12; Chicago)
Build: Microsoft’s annual conference for software developers. (May 10-12; Seattle)
Google I/O: Alphabet’s annual developer conference. (May 17-19; Mountain View, California)
Epicor Insights: Strategies for retail and resource planning. (May 22-25; Nashville)
Signal: Twilio’s annual developer confab. (May 24-25; San Francisco)
Pure//Accelerate: The future of data storage. (June 12-14; San Francisco)
MongoDB World: A gathering of the world’s fastest-growing database community. (June 20-21; Chicago)
Cisco Live: Education for technology innovators. (June 25-29; Las Vegas)
Microsoft Ignite: Hands-on learning and industry insights for business leaders. (Sept. 25-29; Orlando, Florida)