A group representing large institutional investors has approached stock indices providers S&P Dow Jones Indices and MSCI to bar Snap, and any other company that sells non-voting shares, from their stock benchmarks.
Both index providers have said they are reviewing Snap’s inclusion.
Snap has undertaken something unprecedented: conducting an IPO on a US stock exchange with entirely non-voting stock.
‘It is tapping public markets but giving shareholders no say,’ says Amy Borrus, deputy director of the Council of Institutional Investors, which represents big pension funds and other large asset owners. ‘What we would like to see at least is for the indexes to exclude new no-vote companies.’ Meetings with both index providers are scheduled.
David Blitzer, managing director of S&P Dow Jones Indices and chair of a committee overseeing its indexes, said his organization would not add a new stock like Snap for six to 12 months after its IPO in any case, and will use this time to study Snap’s structure.
While the index provider does not have a hard requirement about a company’s voting structure, the committee needs to think through how much influence investors should have, Blitzer comments.
MSCI initially said Snap would qualify for indexes including the MSCI USA Index, but, after additional analysis, said Snap did not meet all requirements. Snap’s inclusion into the MSCI USA Index will now be re-assessed in May.
