Everything you need to know about DVR (Differential Voting Rights)

DVR refers to a type of share issued by a company where the holder has different voting power compared to regular shareholders, usually meaning fewer voting rights but potentially higher dividends.

Companies issue DVRs to raise capital without significantly diluting their control over the company by allowing them to attract investors primarily interested in income rather than governance influence.

Imagine a company wants to raise some money but doesn't want to lose control or power to its current shareholders. One way they do this is by offering a special kind of share called a DVR (Differential Voting Rights) share. These shares don’t give the owner voting rights, or they give fewer voting rights compared to regular shares. So, the company can raise money without giving up control.

Now, you might wonder, why would anyone buy these DVR shares when regular shares come with voting rights? Well, here's the thing – DVR shares are usually cheaper! Investors can get them at a lower price than the regular shares. And sometimes, the company even gives extra dividends (a share of the profits) to DVR shareholders, making them even more attractive.

So, while you don’t get to vote on company decisions, you get a bargain price and possibly a better return in the form of higher dividends. That’s why some people still buy DVR shares.