Majority Shareholder

AAA

DEFINITION of 'Majority Shareholder'

A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder of the company, or in the case of long-established businesses, the founder's descendants. By virtue of controlling more than half of the voting interests in the company, the majority shareholder has a very significant influence in the business operations and strategic direction of the company.

INVESTOPEDIA EXPLAINS 'Majority Shareholder'

Majority shareholders differ in their approach to how the company is managed. While some continue to be heavily involved in the daily operations of the company, others may prefer to take a hands-off approach and leave the management of the company to the executives and managers.


Majority shareholders who wish to exit their business, or dilute their position, may make overtures to their competition or private equity firms, with the objective of getting a good price for their stake. Since the majority shareholder usually has an iron grip on the fortunes of the company, a hostile bid for it is generally out of the question.

RELATED TERMS
  1. Working Control

    When a minority shareholder (or shareholders) has enough voting ...
  2. Penny Stock

    A stock that trades at a relatively low price and market capitalization, ...
  3. Stock Option

    A privilege, sold by one party to another, that gives the buyer ...
  4. Shareholders' Agreement

    An arrangement among a company's shareholders describing how ...
  5. Market Overhang

    An observational theory stating that in certain stocks at certain ...
  6. Tunneling

    An illegal business practice in which a majority shareholder ...
Related Articles
  1. Stock Basics Tutorial
    Investing Basics

    Stock Basics Tutorial

  2. The Two Sides Of Dual-Class Shares
    Options & Futures

    The Two Sides Of Dual-Class Shares

  3. Proxy Voting Gives Fund Shareholders ...
    Mutual Funds & ETFs

    Proxy Voting Gives Fund Shareholders ...

  4. Whom Should Corporations Please?
    Options & Futures

    Whom Should Corporations Please?

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center