Lesson 6 of 6
Votes against cash flow
One filed table shows a government holding 50.26 percent of the votes with 29.02 percent of the shares, and the exchange rule it is exempt from as a result.
By Javier Sanz
Founder of ValueScreener. Built Ninety Nine, a securities services provider, and sold it to a tier-one global bank; ran operations and internationalization at Alpaca, the brokerage API.
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In one minute
- Control and economic ownership are separate, and a filed ownership table shows exactly how far apart they are.
- A controlled company can be exempt from exchange governance rules that apply to everyone else, and it says so in its own annual report.
- The structure is not a scandal. It is a fact to price, and the filing tells you which decisions are not yours.
In a single-class company votes and cash flow move together. Where they do not, the question changes from what the business earns to who decides what happens to it.
One holder, two percentages
- Share of the voting common shares50.26%
- Share of all shares in issue29.02%
Reading the table
Petrobras has two classes: 7,442,231,382 common shares, which vote, and 5,446,501,379 preferred shares, which largely do not. The federal government holds 3,740,470,811 of the common, which is 50.26 percent of the votes and 29.02 percent of the company.
Brazilian law requires the government to hold a majority of the voting stock, so the position is not a choice the company or its minority holders can change. The filing says as much: a change of control would require a change in the applicable laws.
State-owned development bank entities hold further preferred shares, and the public holds 46.74 percent of the common and 80.99 percent of the preferred.
What control changes
That disclosure is the point of reading a governance comparison rather than assuming exchange rules apply. A foreign private issuer follows home-country practice and describes the differences, and the description is where the real governance of the company is stated.
The three shapes to look for
Dual class. Two classes of ordinary share with different votes, often founder-held. Economic ownership can be a small fraction of voting power, and the ratio is set in the articles.
State ownership. As above, with the additional feature that the controlling holder has objectives beyond the share price, and the filing usually says so in its own risk factors.
A listed entity that is not the operating one. The listed company may hold its operating business through contractual arrangements or a chain of subsidiaries rather than directly. Read Item 4.C, the organisational structure, and check what the listed entity actually owns.
How to price it
Not with a discount you invented. With three questions the filings answer.
Which decisions are not the minority's: the board, the dividend, related-party transactions, any sale of the company. Whether the controlling holder's interests are stated as different from minority holders' anywhere in the risk factors, which here they are. And whether that has shown up in practice, which the related-party transactions note and the dividend record will tell you.
A controlled company is not automatically a worse investment. It is one where part of the analysis is about a holder rather than about the business, and the filing is where that part is documented.
Check yourself
A holder has 50.26 percent of the votes and 29.02 percent of the shares. What does that mean?
- The other holders can outvote them by combining
- They control every ordinary vote while bearing under a third of the economics
- The holding is temporary
Show the answer
Answer: B.
The gap between the two percentages is the whole point of a two-class structure, and here it is fixed by law rather than by choice.What does being a controlled company change on a US exchange?
- Nothing, the rules apply to every listed company
- Certain governance requirements, such as a majority of independent directors, need not be met, and the company describes what it does instead
- It cannot list at all
Show the answer
Answer: B.
A foreign private issuer follows home-country practice and describes the differences in its annual report, which is where the company's real governance is stated.How should a control structure be priced?
- With a standard discount applied to any controlled company
- By reading which decisions are not the minority's, whether interests are stated as divergent, and whether that has shown up in the record
- It should not affect the valuation
Show the answer
Answer: B.
An invented discount is untraceable later. The filings name the decisions, the risks and the related-party history, and those are checkable.Sources
- Petrobras, Form 20-F for the fiscal year ended 31 December 2025, filed 2026-04-09: Item 7.A ownership table as at 7 April 2026, the controlled-company statement in the corporate governance comparison, and the risk factor on the controlling shareholder's objectives.
What this leaves out
- One company, one structure. Dual-class founder control and contractual structures raise related but different questions, sketched here rather than worked.
- Ownership tables are as at one date and change with every disposal or issuance.
- Describing a control structure is not a judgement about the controlling holder's conduct, and nothing here alleges any.
- Nothing here is advice about any security.