4 ms·

I 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 fin

by whack 11y ago

I 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 11y ago
With 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 11y 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 11y ago
  If you own 1% of something, you should get 1% representation in something.
- BatFastard 11y 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.
gherkin0 11y ago
> but this still seems like a bad precedent for the financial markets in general. Isn't this sort of thing really common? http://www.investopedia.com/terms/s/share_class.asp http://www.investopedia.com/terms/s/share_class.asp
- slededit 11y ago
  Whack is making an argument about "what should be", not "what is".
  - bmm6o 11y ago
    "setting a bad precedent" implies it's different from "what is". If it's doing what everyone else does, it's not a precedent.
    - slededit 11y ago
      This is significantly more common than it has been in the past, and Zuckerberg is part of that trend. Google like most companies in the past were not founded with a dual share structure and only split very recently. That isn't to say this was never done. Bombardier for example has been tightly controlled by the same family through a dual share structure since its founding.
abhi3 11y ago
He already owns 60% of the voting rights while his actual holding is only in the early 20's. Nobody can oppose him, even if the vast majority of shareholders oppose this new arrangement, MZ can bulldoze it through regardless.
spicyj 11y ago
Buying shares gives you two things: the ability to vote in a company and the ability to sell the shares later at the market price then (in essence, a bet that the value will increase). What's the reason these should be tied together and not traded separately?
kelnos 11y ago
Eh, I don't really have a problem with this sort of thing. Ownership of a company can be structured in lots of different ways. I currently own 10% of an LLC, and part of the arrangement is that I have no say in how the LLC is run. I'm fine with that, because that was the deal I bought into. Now, one could argue that this "changes the deal" for people who already own shares of FB, but a multi-class structure for FB's stock has always been the case (Zuckerburg already owns far less than 50% of the company, but has more than 50% of the voting rights). Anyone who bought into FB after its IPO should have been aware that they would never have control over the company. 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. One could also make the argument that the "teeming masses" have no idea how a company like FB should be run. If you went strictly by percent ownership, I imagine the people who would actually control FB would be institutional investors. The usual party line around here is that the founders know better than those sorts of people, and I tend to agree with that in most cases.

by whack 11y ago

cmdrfred 11y ago

With 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 11y 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 11y ago
If you own 1% of something, you should get 1% representation in something.
BatFastard 11y 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.

gherkin0 11y ago

> but this still seems like a bad precedent for the financial markets in general. Isn't this sort of thing really common? http://www.investopedia.com/terms/s/share_class.asp http://www.investopedia.com/terms/s/share_class.asp

slededit 11y ago
Whack is making an argument about "what should be", not "what is".
- bmm6o 11y ago
  "setting a bad precedent" implies it's different from "what is". If it's doing what everyone else does, it's not a precedent.
  - slededit 11y ago
    This is significantly more common than it has been in the past, and Zuckerberg is part of that trend. Google like most companies in the past were not founded with a dual share structure and only split very recently. That isn't to say this was never done. Bombardier for example has been tightly controlled by the same family through a dual share structure since its founding.

abhi3 11y ago

He already owns 60% of the voting rights while his actual holding is only in the early 20's. Nobody can oppose him, even if the vast majority of shareholders oppose this new arrangement, MZ can bulldoze it through regardless.

spicyj 11y ago

Buying shares gives you two things: the ability to vote in a company and the ability to sell the shares later at the market price then (in essence, a bet that the value will increase). What's the reason these should be tied together and not traded separately?

kelnos 11y ago

Eh, I don't really have a problem with this sort of thing. Ownership of a company can be structured in lots of different ways. I currently own 10% of an LLC, and part of the arrangement is that I have no say in how the LLC is run. I'm fine with that, because that was the deal I bought into. Now, one could argue that this "changes the deal" for people who already own shares of FB, but a multi-class structure for FB's stock has always been the case (Zuckerburg already owns far less than 50% of the company, but has more than 50% of the voting rights). Anyone who bought into FB after its IPO should have been aware that they would never have control over the company. 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. One could also make the argument that the "teeming masses" have no idea how a company like FB should be run. If you went strictly by percent ownership, I imagine the people who would actually control FB would be institutional investors. The usual party line around here is that the founders know better than those sorts of people, and I tend to agree with that in most cases.