9 ms·
It sounds like he's looking to have his cake and eat it, selling his shares while retaining control.
by kylec 10y ago
It 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?
- kang 10y ago> What meaning do 1000 votes have Then why don't we ask the same in a democracy?
- beeboop 10y agoDemocracy doesn't have proxy voting when it's the public voting for representatives.
- deleted 10y ago[deleted]
- TheSpiceIsLife 10y agoBut that's exactly what a representative is: A delegate you entrust to vote on your behalf.
- maxerickson 10y agoBecause there are people that directly control millions of votes in companies and no similar structures in a democracy. The number of shares is the wrong number to reason about, it's the percentage of control that is interesting. If an individual has 51% (or more) control, the comparison to a democracy is obviously nonsense. (I used 1000 shares because it feels like a big number of shares but is still an utterly insignificant portion of Ford, which has a bit less than 4 billion shares)
- kang 10y agoSo minorities should not vote?
- maxerickson 10y agoThey should do whatever they want to do. My point is that when a situation is futile, they should recognize that it is futile. A protest vote for a board member of a company strikes me as one of the more pointless ways to exercise a right to process.
- lisper 10y ago> what you're really getting A shot at some day finding a bigger fool than you to buy your shares for more than you paid.
- ywecur 10y agoAlso the profit the company chooses to distribute at the end of the year...
- aniro 10y ago>>a non-voting share that has no dividends attached
- forgetsusername 10y agoThis sounds cynical, but you're absolutely right: that value of a share in a company which will never return capital to its shareholders is precisely zero. People find that hard to believe, but it's true. Why would the last "greater fool" pay anything for it? Work backwards from there.
- onewaystreet 10y agoMost of the daily trading in stocks these days is not from people that are long term.
- jhh 10y agoIsn't the voting right attached to a stock irrelevant to almost all individual stock holders?
- nothrabannosir 10y agoIt (hopefully) makes them more valuable to potential buyers who do intend to own a significant portion.
- msellout 10y agoThe buyer of non-voting shares is betting that eventually the company will start a dividend or share-buyback program, or that there will be a subsequent buyer that will pay more than the current price.
- funkyy 10y agoAt least in theory...
- cbhl 10y agoA lot of engineers will probably get non-voting shares as RSUs, especially new engineers, acquihires, and refresher grants. They're hoping that they will get more shares than if the company had to continue issuing only voting shares, because it doesn't dilute the founders' control of the company as much.
- a13n 10y agoDonating his shares* Ftfy
- deleted 10y ago[deleted]
- fiatmoney 10y agoWhen one "gives away" that volume of money, what you are doing (whether you like it or not) is trading it for influence. At a minimum you are setting your funding priorities, which has rippling policy effects as people compete for your funding (see the Gates foundation). At a maximum you've just outright laundered it (see the Clinton Foundation) or converted it into an unaccountable ideological blight completely opposed to your original desires (see the Ford Foundation).
- joering2 10y ago> just outright laundered it (see the Clinton Foundation) I'm looking. Any solid proof of said illegal procedure, or just some more conspiracy theory from Alex Jones website?
- fiatmoney 10y agohttp://www.nytimes.com/2015/04/24/us/cash-flowed-to-clinton-foundation-as-russians-pressed-for-control-of-uranium-company.html http://www.nytimes.com/2015/04/24/us/cash-flowed-to-clinton-... Pick a different example if you'd like; plenty of "foundations" exist only to let some oligarch's kids play philanthropist.
- tgb 10y agoThat example is of a secretary of state potentially being influenced by foreign donations, going around the usual laws against campaign contributions from foreign countries. But we're taking about Zuckerberg, who can already take foreign money all he wants. Letting people play philanthropist is kind of the point of a philanthropic foundation.
- ramenmeal 10y agoThis isn't an uncommon practice. Zillow's founders did the same split.
- Mikeb85 10y agoNot uncommon, and if you have a visionary founder/CEO, investors are generally quite amenable to the idea.
- InclinedPlane 10y agoThis was true from day 1, he IPO'd a multi-billion dollar company while still retaining majority control. He's been gaming the system every step of the way.
- erikpukinskis 10y agoHe's been winning the game every step of the way by not letting go of something he held from the start.
- InclinedPlane 10y agoYeah, you do that by keeping a corporation private. Like Elon Musk. Instead he made his corporation public, while keeping it effectively private, and he's doing it yet again.
- lazaroclapp 10y agoHere is the thing: this allows someone like Zuckerberg to separate his control/power within the company he founded, from his wealth. I can easily imagine him being in a position where he truly has more wealth than he wishes to keep for himself (I cannot imagine any way in which I could spend 35.7 billion USD on myself, hell 0.1% of that seems far beyond enough for life to me, never mind the 1% he intends to keep), and yet would not give 0.01% of his say in how Facebook is run for anything in the world. So, this gives three alternatives: 1) He keeps all his stock, retains control, can't spend the money and can't donate it. The money serves to "keep the score" but his goal is to keep control of Facebook. His interest is still to run Facebook according to his ideas of how it should be run. He is not particularly aligned with stockholders who just wish to make money from FB, because, as we have established, he doesn't care about his FB stock's being worth any more in cash directly (unless there is a risk of it collapsing by 99%, but that is an extreme scenario). He cares only in so much as it allows him to exert more power through Facebook in the direction of whichever "historical legacy" goals he has. 2) He gradually sells FB stock as is, slowly cedes control of his company to other investors. Donates the 35.7 billion over time. 3) The company accepts this split. Zuckerberg still keeps control of the company and still runs it according to his wishes without caring directly about personal financial gain, just as in case 1. He is now able to donate (or use) the money as in 2, but faster. So, if you accept that he is sincere in that he doesn't want to accumulate more money in his person but use it for charitable giving (and again, there is no reason to believe he wants get richer, there is little you can buy for yourself with 35.7 billion that 357 million won't get you), then the best alternative for everyone is #3. Facebook will be run just the same as if he couldn't sell his shares, yet the money will be used for charity. p.s. Whether charity at scale should or should not be tax deductible is another matter, and there are arguments either way, but that is sort of independent of the analysis above.