Index fund provider FTSE Russell expects to announce in July whether it will include in its indexes shares of Snap Inc and other companies whose share structure denies investors voting rights. FTSE Russell, which is part of the London Stock Exchange Group Plc, said on Monday that it will consult with stakeholders likely starting this month and conclude at the end of June. The results of the consultation will be announced in July.
Snap, the parent company of messaging app Snapchat, shocked many investors with an initial public offering last month that included a first-of-its-kind share structure that offered IPO investors no voting rights.
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“FTSE Russell is aware of concerns raised by some stakeholders regarding the prospective index inclusion of securities with no voting rights such as the recent IPO by SNAP Inc,” according to a statement from FTSE Russell on Monday.
Clients of FTSE Russell include big fund managers such as BlackRock Inc and T. Rowe Price Group Inc. It offers popular indexes like Britain’s blue-chip FTSE 100 and the Russell 3000 index of U.S. companies.
Although many investors expressed alarm at Snap’s unusual governance structure, the company’s IPO was still in such hot demand that it pulled off the biggest U.S. technology IPO since Facebook Inc in 2012, with a valuation of roughly $24 billion.
(Reporting by Heather Somerville in San Francisco and Ross Kerber in Boston; Editing by Lisa Shumaker)