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There Is Another Major Blow Coming to Snap and Blue Apron That Will Get Everyone Talking

Snap Inc. (SNAP) , Blue Apron Holdings Inc. (APRN) and companies hoping to avoid activist investors in the public market will likely receive their third blow from the world of index providers in the coming month as MSCI Inc. completes a review of whether it will continue to include companies with non-voting shares in its indices.

MSCI's proposal, issued in June, would prohibit corporations from its indices if public shareholders don't receive any votes connected to their share position or in situations where the outside "voting power" of listed shares is less than 25% of the company's total votes. MSCI plans to complete its review in the fall.

If adopted, as many observers expect, both Snap, the company behind the Snapchat app, and Blue Apron, the meal kit delivery company, will be excluded from MSCI's indices. Both companies recently completed IPOs, but Snap took a step that was unprecedented in modern times by issuing only non-voting shares as part of its public offering. With Snap's share structure, the vast majority of voting control is concentrated with the company's co-founders, Evan Spiegel and Robert Murphy. That move essentially prompted MSCI to issue its proposal. The index provider said it introduced the proposal to "address the growing concern pertaining to listings of only non-voting shares."

Institutional investors, who already take issue with a growing number of dual-class share companies listing in the public markets, embraced the Snap IPO as a rallying cry among shareholders.

"What happened is the Snap IPO's only non-voting shares put investors over the edge," said Anne Sheehan, the chief...