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A commonly held view is that all common stock issues are the same. Although overwhelmingly true for most companies, several exceptions exist to this concept. The most apparent exception is multiple-class common stock, more commonly known as dual-class stock, which offers shareholders in one class of stock superior voting rights relative to shareholders in a separate class.

Before comparing single-class and dual-class common stock, single-class common stock can be divided into various structures. For example, besides the primary listing of a single class of common stock, a company may cross-list its shares on stock exchanges in other countries. Depositary banks may create an analogous share for investors to partake in ownership of a foreign listed company. Cross-listings and depositary receipts each facilitate investment in corporations whose primary listings are in other countries. Although cross-listings represent a direct listing on the foreign stock exchange, depositary receipts are indirect ownership vehicles, where an intermediary institution holds shares directly and offers receipts certifying ownership.

Tracking stock represents yet another type of single-class common stock. Unlike most cases of common stock where shares represent ownership claims on a corporation's assets, investors in tracking stock have no such claim, as their investment targets the financial performance of a subdivision of a larger corporation. Occasionally, companies may choose to merge business operations without effectuating a legal merger. This pseudomerger allows retaining two legal identities. These dual-listed companies try to equalize ownership such that a share of one twin equals a share in the other. Yet, each twin's shares correspond to different underlying legal entities and create some differences between shares.

This chapter presents an overview of these special instances of common stock. The remainder of the chapter is organized as follows. The next section describes several instances of single-class common equity by separating cross-listings, depositary receipts, tracking stock, and dual-listed companies. The subsequent section describes multiple-class common stock (dual-class stock). Finally, the chapter offers a summary and conclusions regarding single-class and dual-class common stock.