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Mar 22, 2019

The week in IR: Investors call for Lyft to scrap proposed dual-class share structure, and SEC wants smaller investors to have better and faster stock data

This week’s investor relations-related stories from around the web

The Financial Times reports that investors are calling for Lyft, an on-demand transportation company based in San Francisco, to scrap a proposed dual-class share structure. The publication notes that Lyft is looking to raise around $2 bn and will be seeking a valuation of $20 bn. Lyft plans to create a new class of shares carrying 20 votes each in regulatory filings this month. This will apparently give its founders, Logan Green and John Zimmer, voting power that will exceed the roughly 7 percent of the company they collectively own ahead of the IPO.

SEC chairman Jay Clayton wants smaller investors to have better and faster stock data, according to the Wall Street Journal. His comment follows a speech in which he also said his agency is planning to introduce proposals to shake up a two-tiered system, where big firms get faster proprietary stock-data feeds and smaller players rely on a much slower public ticker tape to make trading decisions.

According to the WSJ, companies are calling on firms that advise shareholders on proxy proposals to face government oversight of their activities, a wish securities regulators are expected to act on as early as this spring. The publication notes that the SEC is expected to propose the first US rules on proxy advisers following an organized campaign by public companies that think proxy advisory firms have too much sway over shareholder proposals.

Investors’ biggest problem now is the slowdown in China’s economy, not the trade war, reports Bloomberg. It says that for the first time in almost two years about a third of investors polled cite slower growth in China as their biggest concern, replacing trade war risks, which had topped the list for nine straight months. Citing a survey of 186 fund managers, conducted by Bank of America Merrill Lynch, Bloomberg says a corporate credit crunch comes third, followed by US politics.

Reuters reports that investors are now showing signs of hesitation after ploughing billions into emerging markets since October. It notes, however, that an uptick in earnings expectations should reassure those hoping to capitalize on stronger economic growth in the emerging world. Citing EPFR Global data, Reuters says emerging equity funds have suffered outflows over the past three weeks, while investors in a recent Bank of America Merrill Lynch survey describe emerging markets as the ‘most crowded trade’.