That’s wrong. The elon failure mode like twitter may not exist, but stock in free fall for tech companies is extremely risky due to how it ties to employee retention and many other operative considerations.
"Facebook has what’s called a “dual class” structure of “Class A” shares and “Class B” shares. The Class A shares are what everyday investors on the regular stock market have access to, and they’re one vote per share. The Class B shares, however, are controlled by Zuckerberg and just a small group of insiders. And every Class B share gets 10 votes."
He still owns almost all of the Class B shares, and so has ~61% of the voting power[2].
Amusingly, the S&P 500 index briefly banned new dual-class shares from entering the index (existing ones were grandfathered in) (2017) but then went back and allowed them again (2023).
Essentially, Zuckerberg was forced to IPO. There were too many people who had been granted shares privately, and there is some sort of law that when >500 people have shares it has to be public (IANAL)? Anyway, he showed up to the meeting with bankers wearing a hoody, and generally acted as if he didn't care what the investors thought, because FB was profitable and he didn't need their money. They grumbled a lot, but bought into the IPO anyway. Since Zuckerberg didn't particularly want to IPO anyway, he could make up any rules he felt like (that weren't actually illegal).
Then the shares had been priced so high that ordinary purchasers got a better price a couple months after the IPO, than high-powered financial types got in the IPO itself. Financial types hate it when they do not get a better price than the ordinary investor. I'm not particularly a fan of FB or MZ, but I do have to admit to admiring his behavior during that whole episode.
"Outsize control given to corporate executives isn’t unique to Facebook. As Pisani at CNBC pointed out, Rupert Murdoch and his family have all the voting power at News Corp. At Google, there are three classes of stock, but the B shares controlled by Larry Page, Sergey Brin, and Eric Schmidt account for some 60 percent of voting shares.
Borrus, from CII, told me that about 10 percent of publicly listed companies have a multi-class share setup, but the proportion is growing among newly public companies, especially in tech. Last year, 19 percent of companies that went public on US exchanges had at least two classes of stock with differential voting rights. In 2005, it was just 1 percent, Borrus said. (Snapchat parent Snap was a highly publicized case because the shares it made public didn’t have any voting rights at all.)"
