What is a Voting Stock?

Stocks can be divided into voting stocks and non-voting stocks according to whether shareholders have voting rights in the operation and management of the company limited by shares.

Voting stock

Issuing restricted stocks is an effective counter-merger strategy. Because the target company has concentrated voting rights, it can prevent hostile mergers and acquisitions from controlling the company by acquiring outbound shares.

Generally speaking, if a company issues shares to raise funds, the proportion of shares held by the original shareholders will decrease and the equity will be diluted. When the company is threatened by mergers and acquisitions, the original shareholders' control over the company will weaken. Therefore, some companies issue restricted voting shares in order to raise necessary funds and prevent them from being acquired by other companies. Dividends on such stocks are higher than ordinary stocks, but they have little or no voting rights.