4 ms·
Isn't this just an example of the risk you take by investing in a company with majority stake held by one person?
by angersock 10y ago
Isn't this just an example of the risk you take by investing in a company with majority stake held by one person?
- matthewmcg 10y agoGenerally yes, but Delaware law provides protections for minority investors when the controlling shareholder is on both sides of a transaction. Here, the board of directors appointed a special committee of supposedly disinterested directors to review the proposal and ensure that it was fair to the minority shareholders. When a transaction is "blessed" in this way it is very hard for a shareholder to challenge it. The investors allege that two of the three committee members weren't really disinterested because of their personal and business ties to Zuckerberg.
- yuhong 10y agoI wonder if this is actually a good idea in the first place.
- lmm 10y agoThe risk that the company will ignore or subvert their legal obligation to have a special committee review decisions that impact minority shareholders? No, I don't think that's a risk you accept. We live in a country with the rule of law.