Voting interest

Voting interest (or voting power) in business and accounting means the total number, or percent, of votes entitled to be cast on the issue at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event which has not occurred at the time.[1]

Voting interest is one form of economic interest. Economic interests comprise all types and forms of investment vehicles that an investee could issue or be a party to, including equity securities; financial instruments with characteristics of equity, liabilities, or both; long-term debt and other debt-financing arrangements; leases; and contractual arrangements such as management contracts, service contracts, or intellectual property licenses.[2]

Non-voting interest

Ownership of more than 50% of voting shares generally gives the right of control and consolidation.[3] In special cases, control is possible without having to own more than 50% of voting stock.[4] For example, if agreed, shareholders may pass control to a chosen one owning much fewer shares (for example in the case of the two petroleum companies, MOL Group and INA - Industrija nafte).

In other cases, companies divide their stock into voting and non-voting classes, which can allow a small minority of shareholders to control a majority of the voting shares. This technique is often used to allow a company's founders to cash out much of their ownership without giving up control.

In the American media, dual-class structures caught on in the mid-20th century as families such as the Grahams of The Washington Post Company and the Ochs-Sulzbergers of The New York Times sought to gain access to public capital without losing control. Dow Jones & Company, publisher of The Wall Street Journal, had a similar structure and was controlled by the Bancroft family but was later bought by News Corporation in 2007, which itself is controlled by Rupert Murdoch and his family through a similar dual-class structure.[5]

Example

Company ABC issues 1,000,000 ordinary shares and 500,000 preferred shares outstanding.
Company XYZ buys 700,000 voting shares and 100,000 preferred ones.
Therefore, XYZ's voting interest is (700,000/1,000,000) = 70%, and its economic interest is (800,000/1,500,000) = 53%

References

  1. ^ "Definition of voting power - Oregon Legal Glossary". www.oregonlaws.org. Retrieved 19 April 2018.
  2. ^ "June 30-July 1, 2004 EITF Meeting" (PDF). www.fasb.org. Retrieved 19 April 2018.
  3. ^ "Mergers & Acquisitions — A snapshot" (PDF). pwc.com. Retrieved 19 April 2018.
  4. ^ http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=ownership+and+control OWNERSHIP AND CONTROL]
  5. ^ "Murdoch clinches deal for publisher of Journal". MSNBC. Retrieved September 18, 2008.

External links

Canwest

Canwest Global Communications Corporation, which operated under the corporate name, Canwest, was a major Canadian media company based in Winnipeg, Manitoba, with its head offices at Canwest Place. It held radio, television broadcasting and publishing assets in several countries, primarily in Canada.

Canwest entered bankruptcy protection in late 2009, leading to the sale of the company's assets. Canwest's newspaper arm was sold to a group of creditors led by National Post CEO Paul Godfrey, through a newly formed company named Postmedia Network. The sale of the company's broadcasting arm to Shaw Communications closed on October 27, 2010, after CRTC approval for the sale was announced on October 22; those assets are then collectively known as Shaw Media On April 1, 2016, these assets were subsumed into Corus Entertainment, an existing broadcasting firm also owned by the Shaw family.Following the sale of assets, the company was renamed 2737469 Canada Inc., ceased to carry on business, and commenced bankruptcy proceedings under the Bankruptcy and Insolvency Act before finally being dissolved on May 27, 2013.

Central European Media Enterprises

Central European Media Enterprises Ltd. (CME) is a media and entertainment company owned by AT&T's WarnerMedia, which operates television channels in Bulgaria, Czech Republic, Romania, Slovakia and Slovenia. The company is listed on NASDAQ and Prague Stock Exchange under the ticker symbol CETV.

Common stock

Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently in other parts of the world; "common stock" being primarily used in the United States. They are known as Equity shares or Ordinary shares in the UK and other Commonwealth realms. This type of share gives the stockholder the right to share in the profits of the company, and to vote on matters of corporate policy and the composition of the members of the board of directors.

It is called "common" to distinguish it from preferred stock. If both types of stock exist, common/equity stockholders usually cannot be paid dividends until all preferred/preference stock dividends are paid in full; it is possible to have common stock that has dividends that are paid alongside the preferred stock.

In the event of bankruptcy, common stock investors receive any remaining funds after bondholders, creditors (including employees), and preferred stockholders are paid. As such, common stock investors often receive nothing after a liquidation bankruptcy Chapter 7.

Common stockholders can also earn money through capital appreciation. Common shares may perform better than preferred shares or bonds over time, in part to accommodate the increased risk.

Conrail

Conrail (formally the Consolidated Rail Corporation, with reporting mark CR) was the primary Class I railroad in the Northeastern United States between 1976 and 1999. The trade name Conrail is a portmanteau based on the company's legal name, and while it no longer operates trains it continues to do business as an asset management and network services provider in three Shared Assets Areas that were excluded from the division of its operations during its acquisition by CSX Corporation and the Norfolk Southern Railway.

The Federal Government created Conrail to take over the potentially-profitable lines of multiple bankrupt carriers, including the Penn Central Transportation Company and Erie Lackawanna Railway. After railroad regulations were lifted by the 4R Act and the Staggers Act, Conrail began to turn a profit in the 1980s and was privatized in 1987. The two remaining Class I railroads in the East, CSX Transportation and the Norfolk Southern Railway (NS), agreed in 1997 to acquire the system and split it into two roughly-equal parts (alongside three residual shared-assets areas), returning rail freight competition to the Northeast by essentially undoing the 1968 merger of the Pennsylvania Railroad and New York Central Railroad that created Penn Central. Following approval by the Surface Transportation Board, CSX and NS took control in August 1998, and on June 1, 1999 began operating their respective portions of Conrail.

The old company remains a jointly-owned subsidiary, with CSX and NS owning respectively 42 percent and 58 percent of its stock, corresponding to how much of Conrail's assets they acquired. Each parent, however, has an equal voting interest. The primary asset retained by Conrail is ownership of the three Shared Assets Areas in New Jersey, Philadelphia, and Detroit. Both CSX and NS have the right to serve all shippers in these areas, paying Conrail for the cost of maintaining and improving trackage. They also make use of Conrail to perform switching and terminal services within the areas, but not as a common carrier, since contracts are signed between shippers and CSX or NS. Conrail also retains various support facilities including maintenance-of-way and training, as well as a 51 percent share in the Indiana Harbor Belt Railroad.

Discovery (Canada)

Discovery is a Canadian English language Category A cable and satellite specialty channel that is owned by CTV Specialty Television Inc. (a joint venture between Bell Media (80%) and Discovery, Inc. (20%), which owns 80% majority of the channel) and Discovery, Inc. (which owns the remaining 20%). The channel is devoted to nature, adventure, science and technology programming.

ESPN International

ESPN International is a family of networks around the world. It was begun in 1989 and is operated by ESPN Inc.

FIN 46

FIN 46, Consolidation of Variable Interest Entities, was an interpretation of United States Generally Accepted Accounting Principles published by the US Financial Accounting Standards Board (FASB) that made it more difficult to remove assets and liabilities from a company's balance sheet if the company retained an economic exposure to the assets and liabilities. One of the main reasons FIN 46 was issued as an interpretation instead of an accounting standard was to issue the standard in a relatively short period of time in response to the Enron scandal.

Groupe TVA

Groupe TVA, Inc. is a Canadian communications company with operations in broadcasting, publishing and production. Quebecor Media holds voting control of the company through near-complete control of Groupe TVA's Class A shares; only the non-voting Class B shares are currently publicly traded.

Henry Dunker

Henry Christian Louis Dunker (6 September 1870 – 3 May 1962) was a Swedish businessman and industrialist in Helsingborg, Sweden. His father was the founder of Helsingsborgs Gummifabrik AB, also known as Tretorn AB, a manufacturer of rubber products which Dunker established as an international business. At the time of his death in 1962, Dunker was Sweden's wealthiest man. His fortune was donated to the improvement of the city of Helsingborg.

Match Group

Match Group, Inc. is an American Internet company that owns and operates several online dating web sites including OkCupid, PlentyOfFish, Tinder, and Match.com. Match Group is headquartered in Dallas, Texas.

Minority discount

Minority discount is an economic concept reflecting the notion that a partial ownership interest may be worth less than its proportional share of the total business. The concept applies to equities with voting power because the size of voting position provides additional benefits or drawbacks. For example, ownership of a 51% share in the business is usually worth more than 51% of its equity value—this phenomenon is called the premium for control. Conversely, ownership of a 30% share in the business may be worth less than 30% of its equity value. This is so because this minority ownership limits the scope of control over critical aspects of the business. Share prices of public companies usually reflect the minority discount. This is why take-private transactions involve a substantial premium over recently quoted prices.

Momentum (finance)

In finance, momentum is the empirically observed tendency for rising asset prices to rise further, and falling prices to keep falling. For instance, it was shown that stocks with strong past performance continue to outperform stocks with poor past performance in the next period with an average excess return of about 1% per month. Momentum signals (e.g., 52-week high) have been shown to be used by financial analysts in their buy and sell recommendations.The existence of momentum is a market anomaly, which finance theory struggles to explain. The difficulty is that an increase in asset prices, in and of itself, should not warrant further increase. Such increase, according to the efficient-market hypothesis, is warranted only by changes in demand and supply or new information (cf. fundamental analysis). Students of financial economics have largely attributed the appearance of momentum to cognitive biases, which belong in the realm of behavioral economics. The explanation is that investors are irrational, in that they underreact to new information by failing to incorporate news in their transaction prices. However, much as in the case of price bubbles, recent research has argued that momentum can be observed even with perfectly rational traders.

Par value

Par value, in finance and accounting, means stated value or face value. From this come the expressions at par (at the par value), over par (over par value) and under par (under par value).

Shaw Communications

Shaw Communications Inc. is a Canadian telecommunications company which provides telephone, Internet, television, and mobile services all backed by a fibre optic network. Headquartered in Calgary, Alberta, Shaw provides services mostly in British Columbia and Alberta, with smaller systems in Saskatchewan, Manitoba, and Northern Ontario. Through its subsidiary Freedom Mobile, Shaw provides mobile services in urban areas of British Columbia, Alberta, and Southern Ontario. The company's chief competitor is Telus Corporation.

Shaw Media

Shaw Media was the television broadcasting division of Shaw Communications. Shaw Media owned the Global Television Network, which broadcasts nationally via 13 television stations, as well as 19 specialty channels including Slice, HGTV Canada, Showcase, Food Network Canada, and History.

On April 1, 2016, Shaw Media's properties were subsumed by sister company Corus Entertainment.

Slippage (finance)

With regard to futures contracts as well as other financial instruments, slippage is the difference between where the computer signaled the entry and exit for a trade and where actual clients, with actual money, entered and exited the market using the computer’s signals. Market impact, liquidity, and frictional costs may also contribute.

Algorithmic trading is often used to reduce slippage, and algorithms can be backtested on past data to see the effects of slippage, but it’s impossible to eliminate entirely.

Supermajority amendment

Super-majority amendment is a defensive tactic requiring that a substantial majority, usually 67% and sometimes as much as 90%, of the voting interest of outstanding capital stock to approve a merger. This amendment makes a hostile takeover much more difficult to perform. In most existing cases, however, the supermajority provisions have a board-out clause that provides the board with the power to determine when and if the supermajority provisions will be in effect. Pure supermajority provisions would seriously limit management's flexibility in takeover negotiations.

Top-ups

In business, a top-up is a variation of a company’s stock repurchase program for common shareholders. Although this buyback reduces voting interest of its shareholder, the shareholder may subsequently increase its holdings, called a top-up. For example, if company A holds 20% of voting power, and company B reduces this power to 10%, company A may increase its voting power to 15% within 6 months.

Yield (finance)

In finance, the yield on a security is the amount of cash (in percentage terms) that returns to the owners of the security, in the form of interest or dividends received from it. Normally, it does not include the price variations, distinguishing it from the total return. Yield applies to various stated rates of return on stocks (common and preferred, and convertible), fixed income instruments (bonds, notes, bills, strips, zero coupon), and some other investment type insurance products (e.g. annuities).

The term is used in different situations to mean different things. It can be calculated as a ratio or as an internal rate of return (IRR). It may be used to state the owner's total return, or just a portion of income, or exceed the income.

Because of these differences, the yields from different uses should never be compared as if they were equal. This page is mainly a series of links to other pages with increased details.

Types of markets
Types of stocks
Share capital
Participants
Exchanges
Stock valuation
Trading theories
and strategies
Related terms

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