Question

Why would a corporation have multiple stock share classes? What are your thoughts??

Answer 1

The main difference between different share classes are voting rights. In normal share class, the voting right may be 1:1, it means if you have 1 share then that is counted as 1 vote. At times promoters of company wants to enjoy capital raised via public offering, but doesn't want outsiders to interfere in company's decision making process. So they want to retain the control. In that case the promoters may issue different class of shares which doesn't have voting rights or have very less voting rights. So it serves both the purpose. First, the company is able to enjoy the capital raising from the share market. Second, control is not lost.