The understanding and buying of Under Armour shares can be a bit of a challenge at times. The stock-split further created confusion among the people. The split created two classes of Under Armour.
The changes created a lot of confusion and hustle. Before owning any share, it is crucial to understand their history and value. There is also a need to understand its basic functions and values.
Let us have a look at UAA vs UAA which under armour shares to own.
The Difference Between UA and UAA
Before figuring out which under armour shares are more valuable to own, it is important to know the difference between them. To put it in a simplified form, the major difference between the two is voting rights.
The UA.C ticker was later changed to UA. So, UA represents the Class C shares, and it does not have any voting rights. The UAA is the Class A shares that have managed to secure voting rights. It gives every owner one vote on every share.
There is also a difference in the voting powers possessed by both UA and UAA. The class A shares give the shareholders the power to cast their votes on governance issues. Therefore, UAA trades better as UA does not garner any voting powers.
If we look at it, both the shareholders will not possess any major powers in moving the company in a particular direction.
How Important are the Voting Rights?
As we discussed earlier, that the major difference between UAA and UA is that of voting rights. So, the question is, are the voting rights essential, and do they create any difference? The votes play an important role in determining the final results of important discussions, decisions, and meetings in a company’s functioning.
Voting rights help in garnering some support and directing the company in a particular direction. However, voting rights do not hold much importance in the case of Under Armour shares.
This is because they are not capable of producing any major benefits for the shareholders. It does not give the shareholders the responsibility of directing the company at any level.
The one vote per share does not give any major advantage and might appear like a moot point. Therefore, it is safe to say that voting rights don’t create much of a difference, and the powers remain the same.
What is the Under-Armour Stock-Split?
A significant change was made to Under Armour shares in 2016. After this, every shareholder was given one share of Class C. This cut the stock of Under Armour into half but did not give any additional voting powers to the shareholders.
The UA Class A shares were changed to UAA later. The UA.C Class C shares were further converted to UA.
Why the Ticker Change to UA and UAA?
They often question that often arises is that a change was made to the ticker symbol? The UA.C shares were already issued, but still, the change was proceeded with without any reason.
The ticker symbols UA and UA.C were trading publicly and for a long time, and the change came as a shock to many people. The company, however, stated no reason for the change. A lot of people came up with explanations.
A lot of people agreed on the fact that the symbols were changed for the sake of cosmetics or appearance. According to them, UA.C appeared a little clumsy and messy for use. UA and UAA were more comfortable to use and took away all the clumsiness.
The ticker change might be related to encouraging shareholders to buy the non-voting under armour shares. Class A shares previously had a very high volume of trading. In the later years, shareholders were seen developing their interest in Class C shares more than Class A.
To sum it up, the ticker change did benefit the company because of the familiarity of investors. So, UA vs UAA which under armour shares to own?
UA vs UAA Which Under Armour Shares to Own?
Now that we know the basic functioning and difference between Class A and Class C shares, UA vs UAA which under armour shares to own? This confusion is often caused among shareholders as there are certain benefits of both UA and UAA.
Let us try to simplify what will be the most beneficial and perfect for you to invest in.
Generally speaking, you are more likely to buy non-voting shares when looking to buy under armour shares. This is the most commonly seen trend. This is entirely because the premium of UAA that is the voting shares is higher than the Class C shares.
The voting rights of UAA are often said to have no significant and efficient value. Still, if we compare it to UA, it has a command over a higher premium. So, what is the reason behind this hype?
The explanation for this demand is that during the repurchase of Under Armour stocks, the company often leans towards UAA Class A shares. This is the reason people often focus on buying UAA shares.
If we talk about bonuses given to company employees and board members, it is exclusive to Class C shareholders. This also reduces its price further if compared to UAA. This also gives the non-voting shares an upper edge on the voting shares.
The ownership offered by both UAA and UA in Under Armours is the same. The voting powers garnered by Class A shares are not of much use. Therefore, it is recommended that you invest in non-voting UA shares. The value and efficiency of both remain the same. UA thus is the best option to invest in.
Also check – What is the difference between BRKA vs BRKB shares?
Summing It Up
The difference between the UAA and UA under armour shares is not a major one. Still, there is always confusion among the shareholders when it comes to investing in Under Armour shares.
When it comes to know about UA vs UAA which under armour shares to own, we have tried to clear some doubts. After going through the shares’ functions and history, it wouldn’t be wrong to conclude that it is better to invest in UA shares.
We recommend you do your research and invest carefully for the desired results.