The 10 Least Shareholder-Friendly Stocks

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Facebook (FB (opens in new tab)) shareholders recently scored a major victory in ultimately preventing CEO Mark Zuckerberg from further consolidating shareholder voter power and claiming it for himself.

Zuckerberg’s original plan was to introduce a newly minted Facebook share class that wouldn’t grant owners any voting rights. While voting shares still would be available in the publicly traded float, this strategy would effectively dilute those shares without diluting the special class of so-called “supervoting” shares Zuckerberg already owns. Thus, the founder would effectively be able to exercise greater control over the company – even if that wasn’t the stated goal.

It was a direct victory for Facebook shareholders, but also an indirect win for investors who have grown weary of not having much say in how companies are run. Unfortunately, the problem of concentrated voting rights – rights that should be equitably controlled by shareholders – remains an all-too-common issue.

“The biggest issue here is that the management teams of these companies are effectively ‘activist-proof,’” said Charles Sizemore, CFA, of Sizemore Capital. “A Carl Icahn or Bill Ackman can’t realistically control enough of the company to agitate for change. That can be a good thing in that it allows management to focus on long-term value creation rather than short-term quarterly results. But it can also be bad in that management is free to go ‘empire building’ and use shareholder capital inefficiently with no outside pressure to stop them.”

Here’s a closer look at 10 companies with shareholder-unfriendly stock structures that you should consider carefully before you make an investment. Shareholders have very little influence over them, as their founders and chiefs have secured a majority of voting power.

Data and share prices are as of Oct. 2, 2017, unless otherwise indicated. Click on symbol links in each slide for current share prices and more.

James Brumley
Contributing Writer, Kiplinger.com
James Brumley is a former stock broker, registered investment adviser and Director of Research for an options-focused newsletter. He's now primarily a freelance writer, tapping more than a decade's worth of broad experience to help investors get more out of the market. With a background in technical analysis as well as fundamental analysis, James touts stock-picking strategies that combine the importance of company performance with the power of stock-trade timing. He believes this dual approach is the only way an investor has a shot at consistently beating the market. James' work has appeared at several websites including Street Authority, Motley Fool, Kapitall and Investopedia. When not writing as a journalist, James works on his book explaining his multi-pronged approach to investing.