Switch Inc. (SWCH) Elimination of "C-shares" Opens the Door to Index Inclusion - Raymond James
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Raymond James analyst Frank Louthan reiterated a Strong Buy rating on Switch Inc. (NYSE: SWCH) after the company announced that the board voted to convert all Class C shares to Class
B shares. The C shares were owned by the founder and CEO, Rob Roy, and had 10 to 1 voting rights. The voting and dual class structure has been a point of contention with investors since the IPO and the analyst believes this will be well received.
The analyst stated "In addition to improving the ownership and voting structure, the dual class of stock was an impediment to Switch being included in indexes as well as ESG investment funds. In particular, well known indices such as FTSE Russell, MSCI, and S&P Dow Jones exclude multi-call voting structures from their indices". "We applaud the move by the board and believe that this can help Switch see stronger gains by widening its potential shareholder base. The benefit of being added to a well-known benchmark is very clear and this opens Switch up to be considered. While we do not believe this is imminent or a reason for the change, this move does open the company up for a potential sale by removing the super voting rights that were a significant impediment".
Shares of Switch Inc. closed at $14.16 yesterday.
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