Voting rights and dual-class stock Investors valued the ride-hailing giant Lyft at more than $24 billion at the time of its 2019 IPO. The dual-class company had 273,097,591 shares of Class A common stock and 12,779,709 shares of Class B common stock outstanding. Company co-founders Logan Green and John Zimmer collectively owned 1,369,182 shares of Class A and all 12,779,709 shares of Class B. Although the equity investments represented by one share of Class A common stock and one share of Class B common stock are identical, the control rights are very different. Holders of Class A are entitled to one vote per share and holders of Class B are entitled to 20 votes per share.

a. What is the percentage equity investment collectively held by the cofounders, CEO Logan Green and President John Zimmer?

b. What is the percentage of control rights (i.e., votes) collectively held by Logan Green and John Zimmer?

c. Imagine that one year after its IPO, Lyft conducts a seasoned equity offering and sells an additional 100 million Class A shares to outside investors. What does this sale of additional shares do to the percentages of equity investment and control rights collectively held by the co-founders, assuming that they neither buy new Class A shares nor sell any of the shares they held prior to the new equity offering?

d. Now imagine that in addition to the 100 million shares that Lyft sold in part c, Green and Zimmer also sell their 1,369,182 Class A shares to outside investors.

With only their Class B shares left, what are the percentages of equity investment and control rights collectively held by the co-founders?

e. Finally, in addition to the changes described in parts c and d, imagine that the co-founders convert six million of their Class B shares to Class A shares, and sell them to outside investors. What are the percentages of equity investment and control rights collectively held by the co-founders?