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Why Astronics Has Nasdaq Common Stock and OTC Class B Stock

Article Quant Q&A · Author: user11980328
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Summary

The document explains why Astronics Corporation has two separately traded stock classes: common stock under ATRO on Nasdaq and Class B stock under ATROB on the OTC market. The distinction is in voting rights. Common shares carry one vote per share, while Class B shares carry ten votes per share, giving holders greater voting influence for each share owned.

The account says shareholders approved the second class in 1987. It also describes a transfer provision: when Class B shares are sold or transferred, they convert to common shares, losing the extra voting rights. The company reportedly has no market for Class B shares, which helps explain why that class trades OTC while common stock trades on Nasdaq. The explanation concerns this company's share structure; it does not establish general rules for why other firms have securities on multiple exchanges or markets.

Key ideas

  • Astronics has common and Class B shares with different voting rights.
  • Common shares carry one vote per share, while Class B shares carry ten.
  • The second class was adopted after a shareholder vote in 1987.
  • A transfer of Class B stock converts it to common stock and removes its extra voting rights.
  • The document attributes the OTC listing to the lack of a market for Class B shares.

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EquitiesUS markets
Full text
# Why a company can have one stock on NASDAQ and one stock on OTC?


# Why a company can have one stock on NASDAQ and one stock on OTC?












ATRO is traded on NASDAQ.

https://finance.yahoo.com/quote/ATRO

ATROB is traded on OTC.

https://finance.yahoo.com/quote/ATROB

I don't understand why a company has one stock on NASDAQ and one stock on OTC. Does anybody know?

## Answer by Pleb (score 4)

https://quant.stackexchange.com/a/70273

Astronics Corporation (ATRO) has two types of issued stock: Common stock and Corporate Class B stock.

The common stock (ATRO) found on NASDAQ is the "standard" type of equity stock that gives you a 1 to 1 vote to share basis (usually you get one vote per share owned, which is the case for ATRO).

The corporate class B stock (ATROB) found on the OTC market is a second type of stock that gives you more company votes per share.

The description of this issued company proxy vote describes the differences quite well:

> [...] Astronics was initially formed with one class of common stock (“Common Stock”). In 1987, the Company’s shareholders voted to adopt a second class of common stock, called Class B Stock. In addition, the Board of Directors proposed appropriate amendments to the Company’s Certificate of Incorporation for the additional class of stock, which were also approved by the shareholders. As a result, Astronics has two classes of stock: Common Stock with one vote per share, and Class B Stock with ten votes per share.

The issued document also describe how a transfer/sale of class B stock will be converted to common stock (with no cost to the shareholder) and lose the rights or entitlements associated with the Class B Stock. As is also written on the company FAQ there is "no market" for the Class B stock and thus the market will be specified as OTC, whereas the common stock is traded on NASDAQ.

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.