14 ms·
Note from Mark Zuckerberg
- eadz 10y agoIs my reading correct? - He is selling his dividend bearing shares, but without losing voting rights?
- JonathonW 10y agoVia http://newsroom.fb.com/news/2016/04/q1-earnings-note/ http://newsroom.fb.com/news/2016/04/q1-earnings-note/ : > For each outstanding Class A and Class B share held by our stockholders, Facebook intends to issue two new Class C shares as a one-time stock dividend. The Class C shares will have the same economic rights as the existing Class A and Class B shares. The primary difference is that the Class C shares are non-voting. Functionally, it sounds sort of like a split to allow Zuckerberg to sell off part of his holdings without losing control of the company?
- salicideblock 10y agoThe way he puts it sounds mucho more amiable, but yes. I also read it that way.
- ape4 10y agoIts part of their mission "to make the world more open and connected".
- deleted 10y ago[deleted]
- kylec 10y agoIt sounds like he's looking to have his cake and eat it, selling his shares while retaining control.
- maxerickson 10y agoInvestors have shown that they are willing to buy non voting shares so he will likely get what he wants.
- JimboOmega 10y agoI've always wondered what you're really getting with a non-voting share that has no dividends attached, especially from a company as big as Facebook that isn't going to get acquired. Related: has there been any academic investigation to how investors value votes?
- SapphireSun 10y agoThat's pretty strange. You'd only get liquidity unrelated to selling the shares from the company being bought or liquidated or in share buybacks. I guess it's more likely that a company of facebook's size can't really die, just sliced apart until nothing at the core remains. Some of those cuts will be profitable and some unprofitable...
- dpark 10y ago> Related: has there been any academic investigation to how investors value votes? Apparently they don't value them very highly. Goog and Googl are only about 2% apart.
- maxerickson 10y agoWith significant insider or founder control, the other voting shares don't really have much influence anyway. Or just in a so called blue chip. What meaning does 1000 voting shares of Ford really have?
- AndrewKemendo 10y agoI wonder if before they announced the 99% plan they didn't realize the implications and after they started implementing it, the case of founder ownership came up and they needed to scramble to make a plan - hence the post. No good deed goes unpunished and all of that.
- gfosco 10y agoNothing he does is short-sighted. I believe it was even mentioned in the original announcement that they were working on a plan to enable doing this while maintaining ownership.
- chris_wot 10y agoHis hubris will be his downfall.
- cloudjacker 10y agoThat's what the lawyers are for. You get some tech nerds getting excited about something, "government doesn't matter". And don't realize they have encroached on something where the government does matter, deeply. I've seen this a lot. So although they aren't invited to every meeting, the lawyers see the press releases and quickly amend the implementation strategy.
- 6stringmerc 10y ago>Everything we do at Facebook is focused on our mission to make the world more open and connected. 1st thought: Then what's with all the passwords? (tongue-in-cheek) 2nd thought: Open and connected for who? SIGINT? 3rd thought: Well, if that's really the case, then why doesn't FB resemble /b/ a lot more? 4th thought: I'm definitely not the target market here, but I hope people who try to invest in FB can afford the risk of the investment. 5th thought: Who am I kidding with #4?
- aston 10y agoThis is a proposed 3:1 stock split which would take the per-share price for Facebook down to the $30s and also give Zuck the ability to donate 2/3rds of his resulting shares without any change to his percentage control of the company.
- dahdum 10y agoSeems ideal if you assume he wouldn't donate his shares if he couldn't retain control.
- deleted 10y ago[deleted]
- zhoutong 10y agoIt gives every shareholder the ability to sell 2/3 of shares without any change to their percentage control of the company.
- hnd00d 10y agoBoth of you are wrong... Let's say there are 100 shares, John owns 25 and Mark owns 75. Stock splits 3:1, there are now 300 shares, John owns 75 and Mark owns 225. 2/3 of 225 is 150, if Mark sold 2/3 of that he would not retain his percentage. Instead what is happening is a new class of stock will be created that is valued differently and has different voting rights.
- deleted 10y ago[deleted]
- adevine 10y agoActually, you are wrong. FB is doing a 3-1 stock split, but the newly issued shares don't have voting rights. So, in your case, Mark would own 225 shares, but only 75 of those would have voting rights, and 150 would be non-voting. Thus, he could sell the 150 non-voting shares and still retain the same percentage of voting control despite only having 1/3 of the "income" rights.
- thesimpsons1022 10y agowhy is it a wordpress site?
- dwaxe 10y agohey, whatever works
- drift 10y agoIt's powered by https://vip.wordpress.com https://vip.wordpress.com
- ninenexus 10y ago^^ This is correct.
- deleted 10y ago[deleted]
- akgerber 10y agoearly 00's php standard-bearers gotta stick together
- bdcravens 10y agoWouldn't call it a standards bearer then - it really picked up momentum around 2010. Many shops that use Ruby, or whatever the cool kids are using, in their core products, deploy their public-facing site using Wordpress.
- bdcravens 10y agoWhy not? The Facebook platform doesn't have a blogging component, so they have to use a CMS, or a custom written solution, or just public static HTML. Perhaps you should jump to the actual value statement you're making ("Real tech companies shouldn't use X (Wordpress)" or "Real tech companies should use Y")
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- swagv 10y agoEnjoy your tax deduction. Next...
- morgante 10y agoConsidering that this announcement was paired with very strong earnings, it seems highly likely that they'll give him what he wants.
- khuey 10y agoHe has voting control of the company. Literally everyone but him can vote against it and it will still pass.
- MetaMetaApplyHN 10y agoReminds me of what Google cofounders moving to insure they kept control of Google.
- jimrandomh 10y agotl;dr: Mark Zuckerberg is proposing to restructure Facebook's stock in a way that trades his future dividends for present-day spending money. He plans to spend this money philanthropically, through the Chan Zuckerberg Initiative.
- deleted 10y ago[deleted]
- bb85 10y ago> Everything we do at Facebook is focused on our mission to make the world more open and connected. Fuck off and die
- dang 10y agoNobody here likes corpspeak, but you can't post comments like this to Hacker News. Please read the HN guidelines and post civilly and substantively, or not at all. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html
- 1ris 10y agoWhen Google did this I had to pay capital-gain tax on all the "new" shares I got. About a year later the german tax department changed their view and I got that back. It sill was very annoying.
- k__ 10y agoseriously Mark? Seriously? You keep control AND get the money and try to sell it with charity? This is what the 0,0001% wants us to believe...
- ciokan 10y agoif i fits i sits
- boldpanda 10y agoFacebook takes a 40% rake from advertisers. Ouch! $2B income from $5B in ad revenue. Hopeful businesses just keep running ads and lining Facebook's wallet. If Mark really wanted to give back, he'd give us more clicks per $.
- calcsam 10y agoThe difference between Silicon Valley and other locales trying to reproduce it has generally not been money. The difference has been smart money. The people who hold the purse strings (founder/CEOs, angels, early-stage investors) have been savvy about what it takes to build and scale a startup. The problem is that there's always a limited money of smart money available to deploy at any given time. The question is then, how do you structure a deal to give unsophisticated investors (aka dumb money) returns, which they want, without giving them control, which would ruin the party. Zuckerberg actually led the way here in 2009 when he got Russian billionaire Yuri Milner to invest $200M in Facebook at a $10B valuation. Everyone thought Milner was crazy then. But he went laughing all the way to the bank. This is another step in that direction, which deserves our applause.
- dang 10y agoRelated post at https://news.ycombinator.com/item?id=11584109 https://news.ycombinator.com/item?id=11584109.
- whack 10y agoI admire Zuck wanting to do good for the world, and wanting to sell his FB shares in order to help others, but this still seems like a bad precedent for the financial markets in general. The shareholders are the owners of the company, and the percentage shares they own should represent the percentage influence they should have in the company. It's easy to dismiss "shareholders" as being wealthy capitalists, but in reality, the majority of shares are owned by the middle class, either directly, or indirectly through pension plans and such. The idea that a "ruling elite" can overrule the wishes of company's majority owners, and use the company's resources in any way they want, is conceptually very disturbing. In the long run, it's bound to lead to corruption, nepotism, and abuse of power.
- cmdrfred 10y agoWith the erosion of the middle class i'd argue it's more the top 35% - 25% of Americans that own a meaningful number of shares. 63% of Americans don't even have $500 - $1000 on hand[1]. [1] http://www.prnewswire.com/news-releases/63-of-americans-cant-afford-500-car-repair-or-1000-emergency-room-visit-300200097.html http://www.prnewswire.com/news-releases/63-of-americans-cant...
- tn13 10y ago>" should represent the percentage influence they should have in the company" Something "should have this much value" is often that eventually leads one down the Orwellian newspeak road eventually. As an investor I care only about returns and nothing else. If I can get a little more by giving up the influence I have over company I would gladly do that. We must remember that pleasing wallstreet has destroyed many companies.
- HappyTypist 10y agoIf you own 1% of something, you should get 1% representation in something.
- BatFastard 10y ago> "As an investor I care only about returns and nothing else." This is the attitude that gets us slave labor, environmental damage, and stronger unions.
- calsy 10y agoI feel its my responsibility to save the world, kill every disease that exists, cure world hunger. What a load of toss! Something always stinks when you read these 'notes' from Zuckerberg. They all follow the same pattern, 'Im trying to save the world..... So here is a market update stating why I made these changes to improve my position, cause I'm saving the world.' At least Bill Gates has humility and articulates the real world problems he is trying to solve. Gates works on his charity only, he is not the CEO of Microsoft and philanthropist. Maybe you mega corps might want to start paying legitimate tax in foreign countries before you start telling us how you are saving the world, pffff.
- electriclove 10y agoThis is a 3 for 1 stock split in that for each share of FB that you own, you will receive 2 shares of the new FB share class that do not have voting rights. If you don't want to own the non-voting rights shares, sell them and buy the regular ones. You will lose a little bit due to the difference in price and the commissions (there may also be tax implications). It is similar to what Google did last year and what Under Armour did a few weeks ago. Here's what Google and Under Armour are priced at end of day today: GOOGL (has voting rights) at 721.46, GOOG at 705.84 UA (has voting rights) at 44.80, UA.C 42.16
- sandworm101 10y agoIf he wants day-to-day control as a founder but doesn't want to keep an ownership interest, then he can sell his shares and apply for the job of CEO. But that means he can be fired. So he wants to be CEO, not own the company, and yet nobody can fire him. The Romans had a word for that: Tyrant, with tyrannicide being a virtue. This scheme is doomed. The sooner he realizes it the fewer heads will roll during the cleanup.
- devindotcom 10y agoThat escalated quickly!
- blue_dinner 10y agoHe's 'donating' his money to the non-profit that was created last year. It sounds noble, but I believe one of the other motives is that he will be able to keep his money in the family for generations. He will be able to get around the death tax and pretty much any other taxes that could take away his fortune. Pretty much every billionaire has done this.
- deleted 10y ago[deleted]
- sleepychu 10y agoIt's not even a non-profit so that he's able to lobby the government.
- BatFastard 10y agoThis is just another scam by the rich to not pay taxes, total BS. That this is legal in U.S is total beyond belief. Its worse the the Panamanian shell corporations.
- biztos 10y agoI like Facebook, and I'm happy to see a gazillionaire get into philanthropy this young, but when I see goals like "cure all diseases by the end of this century" it does make me wonder whether the Foundation might be too disconnected from reality to get good world-changing value for its money.
- bhups 10y agoI see striking similarities between Zuckerberg and the Bill and Melinda Gates Foundation which managed to entirely rid India of polio (!!). I'm not sure that it's totally disconnected from reality.
- tedmiston 10y agoA specific disease in a specific country is a bit more concrete than "all diseases" worldwide.
- linuxkerneldev 10y ago> Gates Foundation which managed to entirely rid India of polio (!!) Uhm, that's completely inaccurate, where are you getting such data? The Gates foundation only got started in 2000, and it isn't clear when they started getting involved in polio vaccination programs. You may give them credit for helping towards the end of the project, but vaccination against polio was started by the Indian taxpayers (Universal Immunization Program) in 1978 and reached about 50% coverage of all infants born in India (including millions of refugees/migrants from Tibet, Pakistan, Bangladesh, Nepal and Sri Lanka) by 1984. The programs immunized hundreds of millions of children well before 2000. [1] http://www.mohfw.nic.in/WriteReadData/l892s/Immunization_UIP.pdf http://www.mohfw.nic.in/WriteReadData/l892s/Immunization_UIP... [2] https://en.wikipedia.org/wiki/Pulse_Polio https://en.wikipedia.org/wiki/Pulse_Polio [3] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4078488/ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4078488/ Giving all of the credit to Bill&Melinda seems like something Hollywood would do. https://en.wikipedia.org/wiki/White_savior_narrative_in_film https://en.wikipedia.org/wiki/White_savior_narrative_in_film
- bedhead 10y agoI'm kinda torn on this. On one hand it's noble and nice to see a rich guy who's interested in things like this as opposed to kickin it on his yacht with models all the time. On the other hand, I hate saying this but the use of the word "responsibility" with regards to "cure all diseases" reeks of egotism and a guy who's kinda living on a different planet. "Haha, only I can remedy what you mere mortals stand no hope of ever doing!" I realize I'm being hyperbolic about it...I really shouldn't criticize I guess.
- duderific 10y agoNo I agree with you, I found that "cure all diseases" thing hopelessly naive and ridiculous. He's gonna need to get a little more focused than that if he really wants to effect changes...maybe pick a couple specific diseases that have big impacts (cancer, malaria, cholera) and start there.
- nsajko 10y ago> noble and nice The noble and nice stuff is PR. I'm not saying Zuckerberg is evil, but that is exactly the point, we don't know anything about him, except that he has an enormous amount of capital, and thus influence. PR gets him even more power. And I think that power is something to be scared off.
- williesleg 10y agoUh oh. Sounds like tax dodging and commandeering control of the company. That can't be good.
- educar 10y agoI will try to believe Mark about making the world a better place when he builds a world that is not about ads and mining our data.
- dpkrjb 10y agoSo essentially a golden share? If I were an equity holder I would be pretty annoyed by this news
- kgwgk 10y agoIf you were an equity holder you could vote against the proposal... but of course it wouldn't matter because he already has the majority of votes. So you could be annoyed, but you shouldn't be surprised that he wants to keep control forever.
- jalopy 10y agoInteresting that he's going to start giving away shares now. Makes me wonder if he doesn't see much more financial upside to FB, at least at current price levels. If there's a lot more value to to accrue to his FB stock (even on a time-discounted basis), wouldn't he want to rationally wait for the future value of those shares to materialize to have maximum impact? Alternatively he could just think that the value to society of funding the right causes (in his mind) is just that much greater than the time-discounted future value.
- khuey 10y agoOr the foundation he donates the stock to can hold onto (most of) the stock. Meanwhile he gets to do the tax free transfer now, before Congress can get around to limiting the size of the tax free transfer you can do or anything else that might impact his plans.
- SilasX 10y agoOT, but ... I'm bothered by how HN mods come down like a hammer on clickbaity titles ("The one thing that can ensure a safe future"), but when it's some official tech company/founder announcement, they're fine with extremely vague submission titles that force you to click on it for any hint on what it's about.
- blattus 10y agoI'm surprised with how many comments here are focusing on Zuck and not the market play for Facebook. I've worked at large companies that claim to be innovative. More often than not, short-term demands made by Wall Street guide business decisions in increasingly poor ways (reducing employee benefits, stymieing R&D, etc.) This announcement obviously helps Zuckerberg personally, but it does also provide a signal to the market for Facebook's direction.
- forgetsusername 10y ago>More often than not, short-term demands made by Wall Street guide business decisions in increasingly poor ways Do you have any evidence that this occurs "more often than not"? I look around America, and the world, and see a ton of successful public companies. Hundreds. Thousands even. Some of them have been around for over a century. What you're saying is exactly the type of thing someone would say as they try to wrest control from other owners; that everything will fall apart if they're not in charge. Silicon Valley likes to paint this picture of the "genius founder", but it's rarely the case in reality. If Zuck was abducted by aliens tomorrow, Facebook would live on.
- studentrob 10y ago> To maintain our focus on this mission, we have always been a founder-led company. ... > Today, Facebook’s board of directors is announcing a proposal to create a new class of stock that will allow us to achieve both goals. I’ll be able to keep founder control of Facebook so we can continue to build for the long term, and Priscilla and I will be able to give our money to fund important work sooner This letter sounds like he is preparing to step down as CEO in the next 5 years. Any bets? He'll maintain "founder control" but doesn't say he'll remain as CEO
- rmtew 10y agoRegarding: > Everything we do at Facebook is focused on our mission to make the world more open and connected. I often find that when I follow Facebook links, I get a login page, requiring me to create an account to see the content. And not even for Facebook itself, I tried to look at images on Pinterest the other day, and if I followed more than one link, I'd get an overlay requiring me to login via Facebook. The site was almost unusable if I wasn't logged into Facebook. The only other sites I've visited in a long time, that hide content unless I login, are newspaper sites.
- evincarofautumn 10y agoFacebook can only really enforce privacy settings on content by authenticating you, unless the content was shared publicly. That’s pretty benign. But I abhor requiring Facebook login to merely view non-FB sites. It’s antithetical to Facebook’s stated purpose, and I think they ought to make it a TOS violation.
- hkmurakami 10y agoOr the fact that you can no longer directly save articles from the Facebook iOS app to 3rd party read it later apps like Instapaper.
- lucaspiller 10y agoTripAdvisor does something similar, on the mobile web app you can only view the top 3 reviews and need to download their app to see the rest. I'm sure some exec thought this would be a great idea to get more downloads, but when I'm out looking for a restaurant I'm not going to waste my time and data waiting for their 112mb (iOS) app to download. I'll just base my decision on the reviews I see or go to one of the many other review sites.
- JaumeGreen 10y agoThere's an option there for reading the rest of the reviews in the mobile web, but you have to select it again and again on every site you want to read the reviews from. So, you don't need to download the app, but they make you suffer.
- jamisteven 10y ago"More open and connected" = more money when you lower your guard and give us access to personal data that we sell for millions of dollars to corporate interests.
- incepted 10y ago> Everything we do at Facebook is focused on our mission to make the world more open and connected. Call me cynical but to me, Facebook's mission is to get the whole planet to create a Facebook account and track them so they can be served ads.
- gear54rus 10y agoYeah, exactly, lies as always. Coupled with the comment below about having to login. Another corporate bs from that guy, moving right along. Though I do recommend watching 'The Social Network' (2010) movie, probably the best thing he has to do with (even though indirectly).
- 746F7475 10y agoOne could argue that this is just a byproduct of the actual goals. If everyone is more open, then "being open should be the norm", which means that you don't care that you get targeted ads, in fact you love that advertisers can show you all the cool stuff you "care" about.
- deleted 10y ago[deleted]