5 ms·

I wonder why Zuckerberg didn't buy the $40M stake personally. I'm guessing he was turned down.

by zaidf 11y ago

sokoloff 11y ago
Why would he? He wanted the whole company and was spurned. What incentive would there be to then reward the founder with 2 commas of personal liquidity? Zuck's not trying to make small side investments personally that might enrich him but would certainly cause questions of conflict of interest with his CEO role at FB.
- zaidf 11y ago
  Pretty sure the fb board wouldn't have a problem with Zuck getting any in into one of their top competitors. Zuck bleeds fb and a minority stake worth a fraction of his net worth isn't going to negatively impact his judgement. It's pretty common for companies to get minority stakes in competitors to get an in. Granted that is much more common in the public sector and sometimes sews the seed for a hostile takeover. This is why the snapchat board would never approve the deal; but the fb board would.
  - akg_67 11y ago
    > It's pretty common for companies to get minority stakes in competitors to get an in. Do you have an example of this? It will be conflict of interest and may bring anti-trust issues. No competitor will allow access to confidential information and board proceedings to be observed by competitor. I have only seen this happening when two companies settle some legal claims (ex: QTM-Data Domain) or form partnership (not competitors, ex: MSFT-FB) when one party is private/startup and other public. Typically public company will divest the stake when startup have IPO.
    - Hengjie 11y ago
      Yes. Porsche made cars but also purchased a stake in Volkswagen. http://priceonomics.com/porsche-the-hedge-fund-that-also-made-cars/ http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...
      - akg_67 11y ago
        Just because Porsche and VW both makes car don't make them competitor. One is a luxury car maker and another is mass car producer. Adjacent market deals are common, direct competition are uncommon.
      - lmm 11y ago
        Volkswagen was their supplier for some components, no? Buying a stake in your supplier/customer is a lot more common and non-antitrusty.
    - zaidf 11y ago
      Dell. Michael Dell owned 15% of the stake. He partnered with a hedge fund to take it private(buy it back from all the many shareholders.) Also, Jos A Bank's takeover by Men's Warehouse, facilitated by minority owner Eminance Capital.
    - blawson 11y ago
      Heineken recently bought a 50% stake in Lagunitas brewing company as one example: https://lagunitas.com/heineken-and-lagunitas-brewing-company-partner-to-take-craft-beer-global https://lagunitas.com/heineken-and-lagunitas-brewing-company...

I wonder why Zuckerberg didn't buy the $40M stake personally. I'm guessing he was turned down.

by zaidf 11y ago

I wonder why Zuckerberg didn't buy the $40M stake personally. I'm guessing he was turned down.

Why would he? He wanted the whole company and was spurned. What incentive would there be to then reward the founder with 2 commas of personal liquidity? Zuck's not trying to make small side investments personally that might enrich him but would certainly cause questions of conflict of interest with his CEO role at FB.

zaidf 11y ago
Pretty sure the fb board wouldn't have a problem with Zuck getting any in into one of their top competitors. Zuck bleeds fb and a minority stake worth a fraction of his net worth isn't going to negatively impact his judgement. It's pretty common for companies to get minority stakes in competitors to get an in. Granted that is much more common in the public sector and sometimes sews the seed for a hostile takeover. This is why the snapchat board would never approve the deal; but the fb board would.
- akg_67 11y ago
  > It's pretty common for companies to get minority stakes in competitors to get an in. Do you have an example of this? It will be conflict of interest and may bring anti-trust issues. No competitor will allow access to confidential information and board proceedings to be observed by competitor. I have only seen this happening when two companies settle some legal claims (ex: QTM-Data Domain) or form partnership (not competitors, ex: MSFT-FB) when one party is private/startup and other public. Typically public company will divest the stake when startup have IPO.
  - Hengjie 11y ago
    Yes. Porsche made cars but also purchased a stake in Volkswagen. http://priceonomics.com/porsche-the-hedge-fund-that-also-made-cars/ http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...
    - akg_67 11y ago
      Just because Porsche and VW both makes car don't make them competitor. One is a luxury car maker and another is mass car producer. Adjacent market deals are common, direct competition are uncommon.
    - lmm 11y ago
      Volkswagen was their supplier for some components, no? Buying a stake in your supplier/customer is a lot more common and non-antitrusty.
  - zaidf 11y ago
    Dell. Michael Dell owned 15% of the stake. He partnered with a hedge fund to take it private(buy it back from all the many shareholders.) Also, Jos A Bank's takeover by Men's Warehouse, facilitated by minority owner Eminance Capital.
  - blawson 11y ago
    Heineken recently bought a 50% stake in Lagunitas brewing company as one example: https://lagunitas.com/heineken-and-lagunitas-brewing-company-partner-to-take-craft-beer-global https://lagunitas.com/heineken-and-lagunitas-brewing-company...