Cyberdyne’s dual-class IPO

Author: | Published: 3 Dec 2014

Koji Toshima of Mori Hamada & Matsumoto analyses the groundbreaking Japanese listing and its effect on the TSE’s listing rules

The record-setting initial public offering (IPO) of Alibaba Group Holding in 2014 has elevated global discussion of the issue of weighted voting rights. Alibaba ultimately chose a US stock exchange for its IPO after Hong Kong officials rejected its request to allow a small group of company insiders to nominate the majority of its board. After losing the world's largest IPO, in August 2014 the Hong Kong Stock Exchange issued a concept paper on weighted voting rights to seek views on whether a corporate governance structure that gives founders or early investors disproportionate voting rights should be permissible.

In the US, after intense debate in 1980s, stock exchanges have permitted companies to use a dual-class stock structure in IPOs. Companies with a dual-class structure have both a low-vote class of...