The analysis pointed out that MicroStrategy Executive Chairman Michael Saylor has lost voting control of the company. For most of the company's history, the dual-class share structure separated equity ownership and voting rights. As of October 21, Saylor held 51.7% of the total voting power of MicroStrategy common stock.
Specifically, Saylor's overwhelming control of Class B common stock exceeds Class A shareholders by a ratio of 10:1, so even if his equity exposure is reduced by percentage, he can still maintain majority control.
Because one person controls the company's management and makes unilateral decisions (such as shifting the company's focus from software to buying Bitcoin), Nasdaq defines MicroStrategy as a "controlled company."
Under Nasdaq governance rules, controlled companies do not have to have independent boards, independent compensation or nomination committees, or independent nominations. MicroStrategy is also not required to let independent directors decide Saylor's compensation or the compensation of consultants, legal counsel and other consultants.
However, due to the large amount of stock and debt MicroStrategy issued to purchase Bitcoin, Saylor's voting control is now less than 50%. Although Class B shares have 10 times the voting power of Class A shares, the company has issued so many Class A shares that its voting power now exceeds that of Class B shares.
About a week ago, MicroStrategy formed a new MicroStrategy Board Nominating Committee, led by Carl J. Rickertsen, and adopted new Nominating Committee charters. More details about Rickertsen's nomination and the powers granted by the company's new charter will be announced in future SEC filings and disclosed no later than the company's next quarterly report, which is scheduled for mid-February 2025.
At press time, MicroStrategy has a market value of $111 billion and holds $31 billion worth of Bitcoin. (Protos)
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