After a long wait Under Armour shares have now split. This is something that has been in the works for a while and was delayed for a bit as the company dealt with some litigation issues regarding the split. It seems some shareholders didn’t feel as secure regarding the transaction as others.
What Is This All About?
Under Armour has historically maintained a dual class share structure with Class A shares and Class B shares. The B shares afford ten votes to the A shares’ one vote and seeing as founder and CEO Kevin Plank owns all of the B shares this has kept the ultimate voting power in his hands. As time goes on and stock is awarded as compensation, these awards can begin to dilute the power of those B shares and if not kept in check Plank in theory could lose his majority voting control; that’s what this split is all about.
What Is This All About?
Under Armour has historically maintained a dual class share structure with Class A shares and Class B shares. The B shares afford ten votes to the A shares’ one vote and seeing as founder and CEO Kevin Plank owns all of the B shares this has kept the ultimate voting power in his hands. As time goes on and stock is awarded as compensation, these awards can begin to dilute the power of those B shares and if not kept in check Plank in theory could lose his majority voting control; that’s what this split is all about.
Stay cool, your Under Armour shares are fine. Split today turns them into $UA & $UA.C. This guy's got our back. pic.twitter.com/yXdRPBRC43
— Jason A. Moser (@TMFJMo) April 8, 2016
The split is effectively two new shares for one old share and will result in shareholders owning one share of the ticker UA with one vote and one share of a new, non-voting Class C share with the ticker UA.C. Click here to read the company’s official press release. It’s important to note that we shareholders are not losing a vote here. We had one vote before the transaction and we have one vote after. And as before, the majority voting rights will remain with Kevin Plank.
Here’s What You Do
Nothing. It’s understandable that some shareholders may perceive this as a power grab for Kevin Plank and while there’s no question the purpose of this split is to keep the majority voting rights in his corner, I don’t have a problem with it. The fact of the matter is that Plank is responsible for making Under Armour what it is today and shareholders have won big time. Under Armour still has plenty of opportunities to grow and we should all remain happy shareholders.
Here’s What You Do
Nothing. It’s understandable that some shareholders may perceive this as a power grab for Kevin Plank and while there’s no question the purpose of this split is to keep the majority voting rights in his corner, I don’t have a problem with it. The fact of the matter is that Plank is responsible for making Under Armour what it is today and shareholders have won big time. Under Armour still has plenty of opportunities to grow and we should all remain happy shareholders.
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