6 ms·

Facebook Scraps Plan for New Share Class

69 points by pdog 9y ago

iaabtpbtpnn 9y ago
Excellent! A founder shouldn't be able to have his cake and eat it too. Once you're a public company, you're taking public money and should be responsible to public votes.
- gfosco 9y ago
  He's still going to maintain a voting majority, just the normal way.
  - Waterluvian 9y ago
    Yeah but a huge amount of his wealth is bound to that responsibility.
    - pmorici 9y ago
      As it should be.
- WikipediasBad 9y ago
  Tell that to Snapchat...
Theodores 9y ago
This bit made me laugh: "Over the past year and a half, Facebook's business has performed well and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more," I don't think we will be needing Facebook to stay in touch with our friends in 20 years time, by then it should be as anachronistic as the Yellow Pages are today.
- hkmurakami 9y ago
  Yellow pages (or rather white pages for individuals) seemed sinister in that unless you opted out, your address and phone number iirc were listed by default. Actually that's kind of like what these social networks still do today isn't it?
  - ams6110 9y ago
    Strangely, 20 years ago very few people thought that their name in the phone book was a privacy concern. A few people got unlisted numbers but that was generally because they were public figures to one degree or another and wanted to avoid nuisance calls.
    - PhantomGremlin 9y ago
      A few people got unlisted numbers but that was generally because they were public figures to one degree or another Probably a bigger reason that "few" people got unlisted numbers was because it actually cost extra per month to do that. As Dave Barry is fond of saying: "I am not making this up".
    - lstyls 9y ago
      This was a concern for most professionals. If you were a physician, lawyer, dentist, etc you did this because you didn't want patients/clients looking you up at home. My father, who is a physician, did this and refuses to open an FB account for the same reason.
      - njarboe 9y ago
        In "Steve Jobs: The Lost Interview" (which is great), Jobs mentions that when he was twelve he needed some computer parts and looked up Bill Hewlett in the phone book and called him at home. Hewlett picked up, Jobs got the parts and a job at HP (summer job?). Maybe people used to respect other peoples time more and having a listed number was not a big problem.
- btown 9y ago
kakarot 9y ago
Another part of the proposal, to change the corporate charter to let the billionaire serve in government without losing control of Facebook, was also dropped, the company said. Interesting... Because I still think Zuckerburg has a political office in his crosshairs. I wonder if this means he is putting that on the back-burner for now or if he plans to introduce an alternate proposal.
- castle-bravo 9y ago
  I hope someone has talked Mark out of it.
  - kakarot 9y ago
    Maybe someone pointed out that having They "trust me" Dumb fucks plastered over every news station for months during mud-slinging season could be bad for business.
    - dingo_bat 9y ago
      I don't think any amount of mud slinging will prevent somebody rich and determined enough from getting elected. Look at Donald Trump.
      - kakarot 9y ago
        I mean it could be bad for business for the company that has 1/4 of the global population in its pocket that is trying to continue to expand its user base.
- hobofan 9y ago
  > Because I still think Zuckerburg has a political office in his crosshairs. Would you care to explain why you would think so?
  - chillydawg 9y ago
    Well he was trying to get a pass from the board to let him run for office while also running FB...
yeukhon 9y ago
> Zuckerberg would have had to defend the move that some shareholders said diluted their power and was decided without their interests in mind. Since FB is so "profitable" and such an attractive stock, why is Zuckerberg so scared of what the shareholders think? Are these the big shareholders or all the shareholders? The only thing I can think of is he can lose his Chairman of the Board position. > The decision follows a rash of technology executives creating special shares to control their companies, and may make similar structures more difficult to put in place in the future. I definitely don't want to see that happening myself. If I were ever in his position, I'd like to retain control while able to sell my assets to do whatever meaningful work I want to pursue without losing my control on the big decisions. I could quit being the CEO, but not the board chairman / president of the board.
- lovich 9y ago
  These special share classes that let the founders get all the money but lose none of the control sound like a continuation of what companies are trying to do with consumers. It seems like almost everyone is trying to say that you can only rent things anymore and no one owns shit. It used to be if I bought electronics I could put whatever software I could get on there without the co oany fighting me, when you'd buy a tractor you could repair it yourself without needing an authorized tech, and when you bought a percentage of a company you got a vote commensurate to the percentage. I understand the desire behind eating your cake and having it too, but I don't know why society and the government have decided that's a fine way for us all to live
  - si33 9y ago
    If Google was owned by Wall Street and Facebook was owned by Steve Bannon (Mercer) the world might be a different place. Everyone knows what happened to the Wright Brothers.
    - lovich 9y ago
      What does it matter if they paid for it? I'm ranting more about the rent seeking that has permeated every aspect of our society than saying one oligarch is better than the other.
shmapf 9y ago
Can someone explain the maths to me? His original plan was to donate 99% of his wealth to philanthropy. The problem was that would involve selling the majority of his fb shares, and he would no longer have control of the company. To solve this he would split the stock into voting and non voting rights which would allow him to sell the non voting ones and maintain control. Now the claim is that the stock has increased so much this is no longer necessary. If I understand this correctly, that would mean that the excess shares he has over 50%, comprise 99% of his wealth, which can't be true because that excess is strictly less than 50%. Or perhaps he's just conceded that he will actually give away control, it will just take 20 years to do so.
- artemisyna 9y ago
  If I had to guess, Zuck is still planning on selling 99% of his shares over his lifetime. As part of that, he wants CZI to be funded for the next 20 years. The part of his shares over 50% (which by definition, is less than 99% of his wealth) can do that, so he is going to fund CZI from that in the immediate term.
- sigmar 9y ago
  Looking at how the current share structure works[1], it seems possible that he knows some Class B will be sold to someone new and his % of vote control will go up. At least that's my speculation. Following this to a crazy extreme (to make the mental math easy), if Zuck owned only class B shares and he was the only one with class B shares, he could sell until his equity was 9.1% of FB and would still maintain majority control. For more realistic math- is there any place that tracks how many class b shares exist? [1] http://www.slate.com/articles/business/moneybox/2012/02/facebook_s_ipo_how_mark_zuckerberg_plans_to_retain_dictatorial_control_his_company_.html http://www.slate.com/articles/business/moneybox/2012/02/face...

69 points by pdog 9y ago

Excellent! A founder shouldn't be able to have his cake and eat it too. Once you're a public company, you're taking public money and should be responsible to public votes.

gfosco 9y ago
He's still going to maintain a voting majority, just the normal way.
- Waterluvian 9y ago
  Yeah but a huge amount of his wealth is bound to that responsibility.
  - pmorici 9y ago
    As it should be.
WikipediasBad 9y ago
Tell that to Snapchat...

Theodores 9y ago

This bit made me laugh: "Over the past year and a half, Facebook's business has performed well and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more," I don't think we will be needing Facebook to stay in touch with our friends in 20 years time, by then it should be as anachronistic as the Yellow Pages are today.

hkmurakami 9y ago
Yellow pages (or rather white pages for individuals) seemed sinister in that unless you opted out, your address and phone number iirc were listed by default. Actually that's kind of like what these social networks still do today isn't it?
- ams6110 9y ago
  Strangely, 20 years ago very few people thought that their name in the phone book was a privacy concern. A few people got unlisted numbers but that was generally because they were public figures to one degree or another and wanted to avoid nuisance calls.
  - PhantomGremlin 9y ago
    A few people got unlisted numbers but that was generally because they were public figures to one degree or another Probably a bigger reason that "few" people got unlisted numbers was because it actually cost extra per month to do that. As Dave Barry is fond of saying: "I am not making this up".
  - lstyls 9y ago
    This was a concern for most professionals. If you were a physician, lawyer, dentist, etc you did this because you didn't want patients/clients looking you up at home. My father, who is a physician, did this and refuses to open an FB account for the same reason.
    - njarboe 9y ago
      In "Steve Jobs: The Lost Interview" (which is great), Jobs mentions that when he was twelve he needed some computer parts and looked up Bill Hewlett in the phone book and called him at home. Hewlett picked up, Jobs got the parts and a job at HP (summer job?). Maybe people used to respect other peoples time more and having a listed number was not a big problem.
btown 9y ago

kakarot 9y ago

Another part of the proposal, to change the corporate charter to let the billionaire serve in government without losing control of Facebook, was also dropped, the company said. Interesting... Because I still think Zuckerburg has a political office in his crosshairs. I wonder if this means he is putting that on the back-burner for now or if he plans to introduce an alternate proposal.

castle-bravo 9y ago
I hope someone has talked Mark out of it.
- kakarot 9y ago
  Maybe someone pointed out that having They "trust me" Dumb fucks plastered over every news station for months during mud-slinging season could be bad for business.
  - dingo_bat 9y ago
    I don't think any amount of mud slinging will prevent somebody rich and determined enough from getting elected. Look at Donald Trump.
    - kakarot 9y ago
      I mean it could be bad for business for the company that has 1/4 of the global population in its pocket that is trying to continue to expand its user base.
hobofan 9y ago
> Because I still think Zuckerburg has a political office in his crosshairs. Would you care to explain why you would think so?
- chillydawg 9y ago
  Well he was trying to get a pass from the board to let him run for office while also running FB...

yeukhon 9y ago

> Zuckerberg would have had to defend the move that some shareholders said diluted their power and was decided without their interests in mind. Since FB is so "profitable" and such an attractive stock, why is Zuckerberg so scared of what the shareholders think? Are these the big shareholders or all the shareholders? The only thing I can think of is he can lose his Chairman of the Board position. > The decision follows a rash of technology executives creating special shares to control their companies, and may make similar structures more difficult to put in place in the future. I definitely don't want to see that happening myself. If I were ever in his position, I'd like to retain control while able to sell my assets to do whatever meaningful work I want to pursue without losing my control on the big decisions. I could quit being the CEO, but not the board chairman / president of the board.

lovich 9y ago
These special share classes that let the founders get all the money but lose none of the control sound like a continuation of what companies are trying to do with consumers. It seems like almost everyone is trying to say that you can only rent things anymore and no one owns shit. It used to be if I bought electronics I could put whatever software I could get on there without the co oany fighting me, when you'd buy a tractor you could repair it yourself without needing an authorized tech, and when you bought a percentage of a company you got a vote commensurate to the percentage. I understand the desire behind eating your cake and having it too, but I don't know why society and the government have decided that's a fine way for us all to live
- si33 9y ago
  If Google was owned by Wall Street and Facebook was owned by Steve Bannon (Mercer) the world might be a different place. Everyone knows what happened to the Wright Brothers.
  - lovich 9y ago
    What does it matter if they paid for it? I'm ranting more about the rent seeking that has permeated every aspect of our society than saying one oligarch is better than the other.

shmapf 9y ago

Can someone explain the maths to me? His original plan was to donate 99% of his wealth to philanthropy. The problem was that would involve selling the majority of his fb shares, and he would no longer have control of the company. To solve this he would split the stock into voting and non voting rights which would allow him to sell the non voting ones and maintain control. Now the claim is that the stock has increased so much this is no longer necessary. If I understand this correctly, that would mean that the excess shares he has over 50%, comprise 99% of his wealth, which can't be true because that excess is strictly less than 50%. Or perhaps he's just conceded that he will actually give away control, it will just take 20 years to do so.

artemisyna 9y ago
If I had to guess, Zuck is still planning on selling 99% of his shares over his lifetime. As part of that, he wants CZI to be funded for the next 20 years. The part of his shares over 50% (which by definition, is less than 99% of his wealth) can do that, so he is going to fund CZI from that in the immediate term.
sigmar 9y ago
Looking at how the current share structure works[1], it seems possible that he knows some Class B will be sold to someone new and his % of vote control will go up. At least that's my speculation. Following this to a crazy extreme (to make the mental math easy), if Zuck owned only class B shares and he was the only one with class B shares, he could sell until his equity was 9.1% of FB and would still maintain majority control. For more realistic math- is there any place that tracks how many class b shares exist? [1] http://www.slate.com/articles/business/moneybox/2012/02/facebook_s_ipo_how_mark_zuckerberg_plans_to_retain_dictatorial_control_his_company_.html http://www.slate.com/articles/business/moneybox/2012/02/face...