A Palantir Technologies Inc. shareholder sued Peter Thiel and its other two founders in Delaware Chancery Court on Thursday, claiming they made themselves “corporate emperor for life” through charter provisions that make investor votes “magically appear and disappear” on demand.

“The founders decided to completely untether voting power from equity ownership” by providing that their shares always control 49.99% of the vote, no matter how much of Palantir they own, the complaint says. “This power grab stretches the flexible bands that keep Delaware law in balance beyond their breaking point.”

More here.

So even if the founders sell their shares, as they have been doing, they control approximately half the company’s votes no matter what. Got only half as many shares as before because you cashed out? No problem! We’ll just give you twice the votes!

Extreme levels of founder control proved a disaster in the case of WeWork, and the same could happen here. On principle, I wouldn’t want to own shares in a company that will never give me or my fellow stockholders any control. And even Adam Neumann didn’t get to keep his votes if he sold his shares.

Note that these provisions continue until the last of the three founders dies. The youngest is 37, so it’s basically a lifetime privilege.

It’s incredible that not only did they create such a bizarre voting structure to deprive shareholders of any say, they’ll defend it in court with shareholder money. On the other hand, if they can’t vote you out, why not? This along with losses every single year of its 18 year existence are enough to keep me far away from this stock.

For more on Palantir, check out these posts:

• Palantir’s Hidden Risk: 20% of Its Commercial Business Is a Single Customer
• Palantir Is Losing $100 Million a Month With No End in Sight
• Palantir Insiders Are Dumping The Stock. What Do They Know That You Don’t?

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Photo: Palantir co-founder Peter Thiel. “Peter Thiel” by jdlasica is licensed under CC BY 2.0