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One way Snapchat’s IPO will be unique: The shares won’t come with voting rights

Here’s how Snap’s stock structure works.

TIME 100 Gala, TIME's 100 Most Influential People In The World - Cocktails
(from left) Bobby Murphy, Evan Spiegel and Rupert Murdoch
PhLarry Busacca/Getty Images for TIME

Snap has filed paperwork for an IPO and is expected to start trading its stock on the New York Stock Exchange early next month.

That means almost anyone with a little money on hand will finally be able to invest in Snap, the company that makes Snapchat and those video-recording sunglasses, Spectacles.

But there’s a bit of a catch: The shares Snap is selling don’t come with any voting rights. That means Snap will take your money, but you won’t have any say in how the company is run. Which isn’t traditionally how these things work.

In fact, Snap even wrote in its IPO paperwork that “to our knowledge, no other company has completed an initial public offering of non-voting stock on a U.S. stock exchange.” So this is rare.

How, then, does Snap’s stock structure work?

  • Snap has three classes of stock: Class A, Class B and Class C.
  • Class A stock is what you’ll be able to buy on the New York Stock Exchange. Those shares do not include any votes, though shareholders who buy them will be entitled to attend the company’s annual shareholder meeting and ask questions.
  • Class B stock is reserved for executives of the company and early investors. Those shares each come with one vote apiece.
  • Class C stock is held exclusively by Snap’s co-founders, CEO Evan Spiegel and CTO Bobby Murphy. Those shares come with 10 votes apiece.

Thanks to this structure, Spiegel and Murphy hold a combined 88.5 percent of the company’s total voting power, according to Snap’s IPO filing. This means that every major decision for Snap, from appointing board members to a possible future sale, will be controlled by just two people.

It’s a stark contrast from, say, Twitter, which has just one class of stock, with all shares awarded the same voting power. It gives investors more of a voice, but it also opens the door for potential activist investors to buy a large portion of the company and throw their weight around when things aren’t going well. The idea that an activist investor might do something like that with Twitter has been a concern for the past few years.

And while it’s hard for any one individual to impact a company’s stock through the voting process, shareholders voting as a group can influence company decisions. That won’t happen at Snap.

Still, there are numerous companies controlled by a small handful of individuals, so Snap’s approach is not uncommon. Facebook CEO Mark Zuckerberg controls 60 percent of the voting power at the social giant, for example, and the company has even tweaked its stock structure to ensure that power doesn’t diminish over time.

At Alphabet, Google co-founders Sergey Brin and Larry Page control more than 52 percent of the vote combined. Rupert Murdoch has nearly 40 percent of the voting power at both News Corp and 21st Century Fox.

But the thing to keep in mind for Snap investors is that an investment in Snap is essentially an investment in Spiegel and Murphy. Even if one of them leaves the company, “they will continue to have the ability to exercise the same significant voting power and potentially control the outcome of all matters submitted to our stockholders,” Snap’s filing reads. Their control won’t be diminished unless they want it diminished.

Spiegel has always been the one in total control at Snap. Now it’s even more official.

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