Duolingo, Inc. Class A (DUOL) has disclosed a new risk, in the Share Price & Shareholder Rights category.
Duolingo, Inc. Class A faces a significant business risk due to its dual class stock structure, which heavily concentrates voting power with a small group of affiliated stockholders. This arrangement allows Class B stockholders, who hold shares with 20 times the voting power of Class A shares, to maintain control over corporate decisions, limiting other investors’ influence on critical matters such as director elections and major transactions. As a result, stockholders with Class A shares might find themselves unable to affect decisions that could align with their interests, and potential acquisition offers could be discouraged. The conversion of Class B to Class A shares upon transfer, except for specific conditions, further complicates the situation, potentially diluting Class A stockholders’ influence over time.
The average DUOL stock price target is $387.50, implying 24.17% upside potential.
To learn more about Duolingo, Inc. Class A’s risk factors, click here.