Snap's Inclusion in FTSE Indexes Said Opposed by U.K. InvestorsBy
A group of U.K. fund managers are lobbying against including Snap Inc., the photo app maker, in indexes run by the London Stock Exchange’s FTSE Russell unit because of corporate governance concerns, according to two people with knowledge of the matter.
The group is against the inclusion of shares in the firm because they are non-voting, the people said, asking not to be named as the plans aren’t public. The issue will be discussed at FTSE Russell advisory committee meetings later this month, they said.
Snap, which owns the Snapchat app, declined to comment and the London Stock Exchange Group Plc declined to comment. The voting structure will prolong Snap’s ability to remain led by its founders, which has been a reason for its success, chairman Michael Lynton wrote in a letter last month to the Council of Institutional Investors.
Snap sold $3.4 billion of non-voting stock in its initial public offering this month, making it the first firm to go public with shares lacking the rights. Regulators should be “mindful” of the precedent around voting rights that was set by the firm’s offering, said Kara Stein, one of the Securities and Exchange Commission’s two members, on March 9.
The London Stock Exchange has said that Snap will be considered for market eligibility in Russell and FTSE Global indexes in June and September respectively.