Switch IPO the latest to limit investor voting rights

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reuters.com |October 5, 2017,

By Noel Randewich

SAN FRANCISCO (Reuters) – When data center operator Switch Inc goes public on Friday it will be the latest tech firm using special shares to limit the rights of minority investors, making it ineligible for inclusion in the S&P 500 under new rules meant to deter such practices.

The Las Vegas company, run by enigmatic founder and Chief Executive Officer Rob Roy, plans to sell 31.3 million shares in an initial public offer late on Thursday for between $14 and $16 a piece, which would raise nearly $500 million and make it the largest technology listing this year after Snap Inc .

Underwriters closed their order book late on Wednesday and the deal was oversubscribed, according to a source close to the IPO.

Roy, who describes himself as an “inventrepreneur” and “tech futurist,” will have 68 percent of voting power following the IPO, thanks to a special share class providing 10 votes per share.

That will keep Switch out of the S&P 500 and other related indexes under new rules instituted by S&P Dow Jones in July after Snap sold shares without any voting rights in its $3.4 billion IPO earlier this year.

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