Retaining Majority Ownership and Control After the IPO

This article examines the issues pertaining to ownership and control of U.S. firms at their initial public offering (IPO). Several recent Wall Street Journal articles have discussed the potential advantages and disadvantages of company founders using dual‐class shares at the IPO to maintain control of the firms they have created. If dual‐class shares are not offered, the management of the company needs to de‐termine what percentage of company shares should be sold at the IPO. The authors discuss the pros and cons associated with dual‐class shares for a firm. © 2014 Wiley Periodicals, Inc.