Dual Class Stocks in Australia 2025: Risks, Benefits & Policy Updates

Dual class stocks are becoming a hot topic on the Australian Securities Exchange (ASX) as more companies eye innovative ways to raise capital and retain control. In 2025, with new ASX policy reviews and a growing tech sector, these share structures are at the centre of debate among investors, founders, and regulators. Whether you’re an active investor or just curious about market shifts, understanding dual class stocks is now essential for smart portfolio decisions.

What Are Dual Class Stocks?

Dual class stocks refer to a company’s share structure where there are two (or more) types of shares, each with different voting rights. Typically, one class—often held by founders or early investors—carries superior voting power, while the other, offered to the public, has limited or no voting rights. This structure is designed to let founders maintain strategic control, even as they raise capital from the public.

• Class A shares: Usually have one vote per share (or sometimes no votes).

• Class B (or other) shares: May have 10, 20, or even 100 votes per share.

Globally, tech giants like Alphabet (Google’s parent), Meta, and Alibaba have leveraged dual class stock to protect their founders’ vision. In Australia, companies such as WiseTech Global have started exploring these models as ASX rules shift.

2025: Regulatory Updates and Market Trends

The ASX has historically been cautious about dual class listings, prioritising ‘one share, one vote’ to ensure transparency and investor protection. However, amid increasing competition from global exchanges and local tech sector lobbying, 2025 has seen a policy shift:

• ASX Consultation: In early 2025, the ASX launched a public consultation on allowing limited dual class structures for high-growth tech and biotech firms, aiming to attract more IPOs to Australia.

• Conditions: Proposed rules include sunset clauses (automatic expiry of special voting rights after 7-10 years), mandatory disclosure, and minimum free float requirements to protect minority investors.

• Global Pressure: ASX is responding to the success of dual class listings on the Hong Kong Stock Exchange and NASDAQ, which have drawn away high-profile Australian-founded companies in recent years.

These changes are already influencing how founders structure their companies and how institutional investors assess IPOs in 2025.

Risks and Rewards: Should Investors Be Wary or Excited?

Dual class structures are polarising. Here’s a closer look at the main pros and cons for Australian investors:

Pros

• Founder-Led Vision: Founders can pursue long-term strategies without short-term shareholder pressure, potentially driving innovation.

• Attracting Listings: More flexible rules can bring high-growth companies to the ASX, broadening investment opportunities for Australians.

• Potential for Outperformance: Some studies suggest founder-led companies with dual class structures outperform peers in the early years post-IPO.

Cons

• Weaker Accountability: Concentrated voting power means minority shareholders have less influence over board decisions, raising governance risks.

• Discounted Valuations: Dual class stocks often trade at a discount, as investors price in the risk of unchecked management control.

• Exit Barriers: Sunset clauses are meant to limit risk, but some structures may entrench founder control far longer than intended.

Real-world example: In 2024, Atlassian’s co-founders retained control of the company via a US dual class listing, while Australian investors missed out on direct ASX exposure. The 2025 debate is partly about keeping the next Atlassian onshore.

How Should Investors Approach Dual Class Stocks in 2025?

With dual class structures poised to enter the Australian mainstream, investors need to adapt:

• Read the Prospectus: Pay close attention to voting rights, sunset provisions, and board independence when considering IPOs with dual class shares.

• Monitor Regulatory Changes: The ASX may update rules further as it tracks the impact of dual class listings on market integrity and investor protection.

• Diversify: Don’t overexpose your portfolio to a single governance model—balance dual class investments with traditional structures.

As more companies seek dual class listings, institutional investors and proxy advisors are also demanding stricter governance and clear timelines for equalising voting power.

Conclusion

Dual class stocks could reshape the ASX, offering founders more control and investors access to a new wave of innovative companies. But with greater flexibility comes the need for vigilance and informed decision-making. In 2025, understanding the nuances of dual class structures is crucial for any Australian investor looking to balance opportunity and risk in a rapidly evolving market.