Cloud storage company Dropbox (DBX.O) is facing pressure from activist investor Half Moon Capital to eliminate its dual-class share structure, which grants CEO and co-founder Drew Houston a voting supermajority, according to a report by The Wall Street Journal on Monday. The hedge fund is raising concerns about the company’s slowing revenue growth and its strategy regarding payment tiers.
Half Moon Capital, which holds approximately 40,000 Dropbox shares valued at around $1.1 million, argues that the current structure prevents shareholders from holding management accountable for what it describes as “significant missteps.” The proposal to eliminate the dual-class system would require a majority vote for approval, meaning Houston’s support would be necessary for it to pass. Currently, Houston controls about 77% of the voting power due to his Class B shares, which carry 10 times the voting rights of Class A shares.
While Dropbox and Half Moon Capital have not yet responded to requests for comment, the hedge fund believes the proposal—set for a vote at the company’s annual meeting—will pressure management and the board to implement additional changes.
In October 2024, Dropbox announced plans to reduce its global workforce by 20%, following a previous layoff of 16% of its employees in 2023.
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