CrowdStrike CEO cuts his voting power by 92% with unexplained gifts
bloomberg.com125 points by wslh 2 days ago
125 points by wslh 2 days ago
Gifting stock to a trust is a common way to avoid certain types of taxes in some cases.
If his end goal is to simply liquidate his position, maybe the "gifting shares to trust" is just part of a tax avoidance scheme (even if it sounds illegal, it often isn't).
I've seen this very commonly with private company founders expecting an exit in the next couple years, but very possible this situation is completely different.
The fact that it triggered a clause to eliminate preferred voting shares is very odd. Either a complete oversight by the guy's lawyer, or if it was done intentionally, I have no idea.
There's just no way a guy with that much money sells out of the controlling stake in his own company without knowing it was going to happen.
The billoin dollar question is why? Seems it could only be a handful of things:
Major health problem so the controlling stake won't matter.
Major unannounced issue that would cause the stock to drop precipitously (on paper he'd be facing prison time, but I think we all know he won't even if true).
Outside pressure, presumably from a government entity because I don't know what private party would have the juice to push him out.
Outside of that, unless he's just done with the rat race, planning on retiring and just not working anymore I've got a lot of nothing. When you have as much money as he has, I don't see why you'd give up control of your baby willingly as part of "normal estate planning" at his age.
> Major unannounced issue...
To be fair, I'm not sure it could be much worse than the major announced issues of the past few years.
Probably related to replacing 500 positions with what I can only assume will be Genmoji.
https://www.theguardian.com/technology/2025/may/09/crowdstri...
> pressure, presumably from a government entity
Given the business crowdStrike is, it is now unlikely this scheme was setup by some three letter agency from the countries involved with this company. So, the control of the company is handled by one or more entities they trust.
"The fact that it triggered a clause to eliminate preferred voting shares is very odd. Either a complete oversight by the guy's lawyer, or if it was done intentionally, I have no idea."
It's probably not an oversight. E.g. in Hong Kong, it is mandatory to have a minimum amount of equity (I think 10%), otherwise you will lose all super-voting power. I don't think a similar requirement is present in the US, but the logic behind is valid: the super-voting power is for a founder / important member of the company to maintain control and therefore allow for a long-term strategy to be carried out, even after multiple rounds of financing. If you're no longer a major shareholder and working for the company, the super-voting power may no longer be appropriate, as your priorities and preferences may now differ from the company.
This does not look like tax avoidance scheme. this looks like exit. which is million times better outcome than selling his shares to UAE fund. Most disturbing thing is that this company deals with most sensitive parts of their customer business and this opaqueness from CEO should be ringing alarm bells for any company relying on their service.
> a tax avoidance scheme (even if it sounds illegal, it often isn't)
It's never illegal, as far as I know. When it's illegal it's tax evasion.
It's always tax evasion, there are just some forms of tax evasion that are legal if you have enough money to make it work.
Definitionally, "tax avoidance" refers to legal methods, and "tax evasion" refers to illegal methods.
I understand the semantics and the legal frameworks. I disagree with their application and the rules in place to enable the wealthiest individuals to preferentially pay lower tax rates than Joe Schmo. It's tax evasion that has been legally codified through lobbying of special interest groups.
You don't go to court for tax avoidance. You do go to court for tax evasion.
It's tax evasion if you are found guilty, it's tax avoidance if you are found innocent.
You are never found as innocent within U.S. criminal courts. It’s only guilty or not guilty.
"You are innocent until proven guilty". Now lets all build out our truth tables to check if what he said is accurate.
Presumption of innocence is not the same as a court verdict. A court doesn't find innocence, it merely finds not guilty.
Should new evidence come to light, new charges can be filed.
When the doors to the courtroom close the defendant enters a quantum state whereby they are simultaneously innocent and guilty. Once the court room doors open the wave function collapses and a state is revealed.
Giving to a trust that then sells is also a way to manage insider sales restrictions, if the trust acts independently.
Not just taxes, liability too.
Doing it before creditors are interested in you, including even a spouse, shields those assets. With a good spendthrift clause even alimony couldnt get those assets. You dont get them with either though, but you can still direct control.
No longer on your balance sheet
For all we know, the CEO could have been diagnosed with a terminal illness. It's dangerous to read too much into these sales without more information, even if the situation is unusual.
Is this 1 or 2 large customers taking a massive stake to avoid the business getting sued into the ground? Or perhaps dumping equity by the backdoor because they are about to get sued into the ground?
According to the article, the CEO sold stock, and gifted stock to at least four trusts that have, in turn, sold the stock gifted:
> Subsequent filings from four trusts show that about half of his gifted shares were transferred to them. Those trusts have in turn sold most of the shares they reported receiving, netting at least $1.2 billion in proceeds so far.
Seems like the CEO thinks that it's downhill from here; I'm not sure what other reason there would be to do this.
> A spokesperson for CrowdStrike said the filings reflected estate planning and philanthropic activities
Estate planning is very likely code for tax avoidance. I know basically nothing about Kurtz, I would venture this is all going to family and structuring this staggering generational wealth so they don't overpay taxes.
Estate planning is about avoiding probate courts. It makes the transfer of control of assets much cleaner with almost no risk someone (e.g. an aggrieved family member) can tie it up in courts for who knows how long. It’s why you see even average personal homes placed in trusts.
Placing personal homes into living trusts is also done for medicaid purposes. If you don't actually own the house then medicaid doesn't count it as an asset that you have to sell to pay for medical care, and there's a five-year clawback so you have to do it well in advance of needing it.
The average personal home is absolutely not placed in a trust. It can be but moving your residence into a trust for estate planning purposes is not a common thing.
It depends on the state. california is known for expensive probate and has a lot of turnkey trust attorneys with strong marketting. I still don't know that 'the average personal home' is in a trust there, but there are lots of 'average personal homes' held in trust, not just big fancy houses.
OTOH, California recently added a transfer on death deed that may provide a simpler way to avoid probate on homes, which may reduce the number of trusts formed just for that.
A lot of people leave California and still think they need a trust in other states, so trusts in other states are growing in numbers as well.
It's also done if you have, say, a vacation home in another state or have other assets which would make probate complicated.
My parents did it on advice of their financial advisor. Is it common, probably not, most people don't have a financial advisor but setting up a revokable trust as part of an estate plan is not something that only the ultra-wealthy can do. It can make a lot of sense if you have any postive net worth to pass along to heirs. A lot of people don't, and if you are going to "die broke" (by intent or by happenstance) there's no point.
This depends highly on state law and how bad inheritance taxes are.
"I have not seen this before" != "this is not common," as much as people on the internet tend to confuse the two.
"you see even average personal homes placed in trusts." is very much not the same sentence as "The average personal home is placed in a trust"
I did not intend to imply write average personal home is placed in a trust.
>It’s why you see even average personal homes placed in trusts.
This statement meant to convey that people with average levels of wealth, such that tax liability is low enough such that tax avoidance is not necessary, can also benefit from spending a couple thousand dollars with an estate lawyer.
Technically, their heirs benefit because they don’t need to deal with probate court.
I know plenty of average person homes placed into irrevocable trusts for avoiding the medicaid seizure by parents doing so many years ahead of time as they get old.
How could
> 1 or 2 large customers taking a massive stake avoid the business getting sued into the ground
?
It’s classified as a gift, like a charitable donation possibly.
No, when you gift anything over $19,000 (I think) you need to file a "gift tax return", and the IRS taxes the gift accordingly.
Almost certainly not classified as a charitable donation.
Minor note: the overage from $19k isn’t auto-taxed, it is just recorded and counts against your $14M-ish lifetime gift tax exemption (also relevant for estate tax).
In this case, he obviously blows past that limit quickly.
> The drawdown in his voting stake has been so dramatic that Kurtz in December triggered a clause eliminating all of CrowdStrike’s super-voting stock...
A plausible explanation.
Not really. Super voting stock is just for him to retain control. This type of behavior is extremely unusual.
Rather bizarre move, can it be squared somehow with another weird move from CrowdStrike last week, the slashing their workforce with the bullshit justification it will be replaced by AI?[0]
Too much of a coincidence in a short amount of time.
[0] https://www.theguardian.com/technology/2025/may/09/crowdstri...
Pump the stock up a bit after the "accounting errors"?.. Seems like the CEO is trying ot slip out the door before things crash?
https://finance.yahoo.com/news/crowdstrike-probed-over-32m-i...
Can't call a rug-pull a rug-pull when too many speculators are still too invested in this hype-cycle.
This could indicate many things but I’m having a hard time seeing it as a vote of confidence…
Surprised the stock is up.
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I don't think anybody claiming it to be more important. It's just a different forum for different types of news.
HN is a US Site
America doesn't care about Russia. Russia is a threat to Europe, not to America, and America doesn't care about Europe either.
Likewise Europe doesn't care about China, and certainly countries like North Korea - China is a threat to America.
Europe has many problem, many of which were caused or fanned by Russia over the last couple of decades, from the refugee crisis to brexit to German gas reliance, all of which has increased European fragmentation (which was hardly a harmonious world in 2005) and weakened the continent. I'm not sure if Europe can work together enough to respond to the challenge -- it's failed to do so so far, and pro-russian elements are gaining popularity in recent elections in Europe, from the UK to Germany to Romania.
Interestingly outside of Russia's sphere of influence (Canada, Australia), elections have shown a different direction.
Brexit was Steve Bannon, Cargyll and other US companies. So if you are saying Steve Bannon is russian agent that i do not have problem with. But he works from USA. Cargyll because they wanted to get rid of European unions regulations and buy distressed UK companies. Check Cargylls economic data /news before and after brexit / vote.
Brexit was successful because tools developed for USA was used / tested on UK. USA writes in English. UK writes in English. Facebook (US company) was fined for brexit. Cambridge analytica, is gone? Lessons learned, Facebooks price up.
Also US individuals and US companies paying to distort results of sociological surveys done / published in European countries is well known at this point.
Germany reliance on russian gas was measure for transition towards renewable sources, it was cheapest energy after renewables, even then, so why pay for other fossils? Directive 2010/31/EU, Green deal, and many other were part of post 2008 US financial crisis efforts to make Europe sustainable (not eco nonsense, but economically, these efforts were accelerated after 2019/2020. Where US scientists working in Wuhan.. just joking, or am i ?
USA for example California got inspired all the time be example of Germany in all sorts of regulation. emissions on vehicles even before 2000s... Texas is second biggest deployment of PV and batteries in west. florida (red, trump state) is state with highest ratio of fully electric homes....
Soft power is very strong with this one. (US) Darth Vader: [1:55:54] The Force is strong with this one. ( "Lucas HATES europe with all his might". Which you can google and see for yourself, how strong force is with this one. )