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.
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.