This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Two Classes of Stock, One Outrage

This column was originally published on RealMoney on Jan. 9 at 10:58 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here .

"Emmis Investor Seeks End of Dual-Class Stock" is the headline on a Wall Street Journal story about Martin Capital Management trying to get Emmis' (EMMS - Get Report) Jeff Smulyan, CEO and chairman, to eliminate the main obstacle to takeover, the A and B shares.

Of course, dual classes protect management. In this case, Smulyan has control of 66% of the votes with less than 20% of the shares.

That's a similar situation to the one of the activists who're trying to change the voting control provisions at The New York Times (NYT - Get Report).

Fools.

The reason management set up the two classes of stock is because they never want anyone to have control other than themselves. Undoing it is like saying, "We want to lose control." Why would they want that?

When we started TheStreet.com (TSCM), the bankers asked us if we wanted to have two classes of stock, because many media companies desire such a structure so they can insulate themselves from pressure.

I asked them, in my own ridiculous bluntness: "Are you out of your minds? Why would I want to hose our own shareholders?"

That's what these two classes of stock do. I think they are an outrage. One man, one vote should be the only standard.

What I don't get is who in heck would want to own one of these companies, especially when the only way out when they go bad is to sell your own stock, not to sell the company? The notion of value is hidden and never to be unlocked.

I believe that those who are trying to wrest these companies away from their owners are wasting their time. Go get other stocks. And those who are speculating that these stocks are worth getting into, now that these managements are being pressured?

Don't waste your time.


Please note that due to factors including low market capitalization and/or insufficient public float, we consider Emmis Communications to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Cramer was long TheStreet.com.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS . Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here .

TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
EMMS $1.36 -3.50%
NYT $13.03 -1.40%
AAPL $118.01 -2.70%
FB $93.80 -0.22%
GOOG $627.53 0.31%

Markets

Chart of I:DJI
DOW 17,532.25 -157.61 -0.89%
S&P 500 2,090.08 -13.76 -0.65%
NASDAQ 5,098.9980 -29.2830 -0.57%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs