After several delays, Microstrategy has filed to go public in a move that will see Mike Saylor, president and chief executive, retain control of the company despite selling a majority of stock to the markets and employees.
The online analytical processing (Olap) software supplier had promised to register its S-1 filing to go public with the US Securities and Exchange Commission (SEC) both before and after Christmas (see Newswire 6 November 1997 and 23 January), but delayed it on both occasions.
The offering, which is expected to raise about $36 million, has been underwritten by Merrill Lynch and Hambrecht & Quist, and according to the S-1 will be used for ?general corporate purposes, including working capital, capital expenditures, repayment of indebtedness and possible acquisitions or investments?.
But, as Nigel Pendse, author of 'The Olap Report', explained, despite flotation on the Nasdaq exchange, control of the company will remain firmly with Saylor.
?The company?s stock is to be structured in two classes, so that Michael Saylor will retain total control of the company, even if a majority of stock is sold to outsiders and employees. The holders of the high-voting B Class stock (mainly Michael Saylor and chief operating officer Sanju Bansal) will also collect a $10 million dividend on flotation, which is a significant portion of the likely IPO proceeds,? he said.
The prospectus likewise points out, in the risks section, that ?Mr Saylor will be able to control the Company through his ability to determine the outcome of elections of the Company?s directors, amend the Company?s Certificate of Incorporation and Bylaws and take certain other actions requiring the vote or consent of stockholders, including mergers, private transactions and other extraordinary transactions and the terms thereof.?
This is because Class B shareholders hold 10 votes per share compared with only one vote per share for Class A stock, and Saylor owns about 73 per cent of the Class B shares.
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