5 ms·

If this contract is real, this is bad news for Zuckerberg. Considering that his lawyers are "unsure" he signed the contract, this is basically an admission tha

by codexon 16y ago

If this contract is real, this is bad news for Zuckerberg. Considering that his lawyers are "unsure" he signed the contract, this is basically an admission that the contract looks valid at first glance, and that the lawyers are probably spending day and night trying to get it dismissed on a technicality, or hoping it is a forgery. It will also be interesting to know if people here think Ceglia deserves those Facebook shares. Many people here are investors and would probably side with him, but others have expressed the sentiment that he provided a negligible amount of money and therefore contributed very little to the success of Facebook.

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blueberry 16y ago
Many people here are investors and would probably side with him... Interesting, I always thought most HN were starving poor hackers :)
- megablast 16y ago
  Many and most are not the same thing. Many people here could be investors, while most could be poor hackers.
  - blueberry 16y ago
    True, but if that's what he meant, then his sentence doesn't really have a point.
- deleted 16y ago
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moultano 16y ago
>It will also be interesting to know if people here think Ceglia deserves those Facebook shares. That's what interests me most about this. I'm assuming this will come to some settlement that won't destroy facebook, and will probably give this guy some money. I'm curious about the ethics involved. Is contract law so inviolate that most people here would advocate honoring it?
- timr 16y ago
  Unlike many people, I'm far less interested in why this guy is filing suit so late in the game (which will almost certainly become a critical point of contention in Facebook's arguments), than I am interested in the legitimacy of the contract itself. If it turns out that Zuckerberg signed this contract in good faith, then I'm going to start to see him as either a real sleazebag, or a complete idiot. Anyone can read and understand the terms of that contract, so either he didn't read it (idiot), or he purposefully ignored it when Facebook hit it big (sleazebag). Either way, not good for Zuckerberg. Facebook's army of attorneys may ultimately win the day on technical grounds, but if this contract is legitimate, I'd hate to see the plaintiff lose out on a lucky investment because he was an unsophisticated investor.
  - ratsbane 16y ago
    "... real sleazebag or a complete idiot" is a bit harsh. He was young and naive. Who isn't at 18? Zuckerberg was born May 14, 1984. This contract was signed April 28, 2003. He was 18 years old. If this contract had been signed a year earlier, it wouldn't matter because Zuckerberg would have been too young to be a party to it. Even though he was old enough to contract, I doubt Zuckerberg understood the implications of that contract (assuming it's real.) Ceglia probably didn't either.
    - epochwolf 16y ago
      > If this contract had been signed a year earlier, it wouldn't matter because Zuckerberg would have been too young to be a party to it. Incorrect. A 17 year old can sign a contract, they just have the option of voiding the contract until they turn 18. (Which is why most people avoid signing contracts with minors.) Once they turn 18 they no longer have the option of voiding the contract. There may be a period you can dispute the contract while 18 but not indefinitely. I don't remember all the details but I do know that contracts signed with minors are valid just very risky for you.
gscott 16y ago
From my reading it looks like Ceglia was supposed to pay the hosting fees. I wonder how much the hosting fees are and what his bill would look like going back 6 years to now.
- michaelfairley 16y ago
  Actually, it says that the "Seller [Zuckerberg] agrees to maintain and act as the sites webmaster and to pay for all domain and hosting expenses from the funds received."
  - gscott 16y ago
    It still seems to be a weak point in the contract. Expenses grew beyond what the investor was putting in.
hristov 16y ago
I think it is pretty certain that if Ceglia wins this the results for the tech start up industry will be pretty bad. Facebook shares have been trading in closed deals for a while and I am sure there are many people that believe that they have millions or even billions of dollars in their facebook shares. If this guy wins all of these shares may lose more than 80% of their value. (This is not necessarily the case, but there is a marked possibility). This will be felt in the VC industry, believe you me. The VC and angel investor industry relies on the big payoff and if the biggest payoff in recent history turns out to be a dud, then there will be much less demand for new investments and the few investors that remain will insist even more on professional CEOs to swoop in and take things over. So this is something to think about. Of course, it does not mean he should not get the shares if he has a right to them legally, but the repercussions of this can be huge.
- rockfile4 16y ago
  I'm not sure where the (80%) comes from, but investors will only lose value if the total value of Facebook declines. If it turns out that Ceglia and Zuckerberg each owned 50% of Facebook in 2003, their ownership would each be diluted down in subsequent rounds of financing (from the "Investors"). So if the equity capitalization before this lawsuit is assumed to be "Investors" - 40% and Zuckerberg - 60% (an example), the new capitalization if Ceglia wins would be Investors 40%, Zuckerberg 30% and Ceglia 30%. No impact on "Investors" ownership.
  - infinite8s 16y ago
    Except future rounds of capitalization might be invalid since Zuckerberg didn't have the legal right to dilute the shares he didn't own.
    - deleted 16y ago
      [deleted]
    - charleyrock 16y ago
      First, that comment is so vague that it doesn't mean much and second, who in their right mind would want those rounds of financing to be invalid? This case is irrelevant - it will either be dismissed or settled and will have ZERO impact on valuation or otherwise on existing investors.

by codexon 16y ago

deleted 16y ago

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blueberry 16y ago

Many people here are investors and would probably side with him... Interesting, I always thought most HN were starving poor hackers :)

megablast 16y ago
Many and most are not the same thing. Many people here could be investors, while most could be poor hackers.
- blueberry 16y ago
  True, but if that's what he meant, then his sentence doesn't really have a point.
deleted 16y ago
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moultano 16y ago

>It will also be interesting to know if people here think Ceglia deserves those Facebook shares. That's what interests me most about this. I'm assuming this will come to some settlement that won't destroy facebook, and will probably give this guy some money. I'm curious about the ethics involved. Is contract law so inviolate that most people here would advocate honoring it?

timr 16y ago
Unlike many people, I'm far less interested in why this guy is filing suit so late in the game (which will almost certainly become a critical point of contention in Facebook's arguments), than I am interested in the legitimacy of the contract itself. If it turns out that Zuckerberg signed this contract in good faith, then I'm going to start to see him as either a real sleazebag, or a complete idiot. Anyone can read and understand the terms of that contract, so either he didn't read it (idiot), or he purposefully ignored it when Facebook hit it big (sleazebag). Either way, not good for Zuckerberg. Facebook's army of attorneys may ultimately win the day on technical grounds, but if this contract is legitimate, I'd hate to see the plaintiff lose out on a lucky investment because he was an unsophisticated investor.
- ratsbane 16y ago
  "... real sleazebag or a complete idiot" is a bit harsh. He was young and naive. Who isn't at 18? Zuckerberg was born May 14, 1984. This contract was signed April 28, 2003. He was 18 years old. If this contract had been signed a year earlier, it wouldn't matter because Zuckerberg would have been too young to be a party to it. Even though he was old enough to contract, I doubt Zuckerberg understood the implications of that contract (assuming it's real.) Ceglia probably didn't either.
  - epochwolf 16y ago
    > If this contract had been signed a year earlier, it wouldn't matter because Zuckerberg would have been too young to be a party to it. Incorrect. A 17 year old can sign a contract, they just have the option of voiding the contract until they turn 18. (Which is why most people avoid signing contracts with minors.) Once they turn 18 they no longer have the option of voiding the contract. There may be a period you can dispute the contract while 18 but not indefinitely. I don't remember all the details but I do know that contracts signed with minors are valid just very risky for you.

gscott 16y ago

From my reading it looks like Ceglia was supposed to pay the hosting fees. I wonder how much the hosting fees are and what his bill would look like going back 6 years to now.

michaelfairley 16y ago
Actually, it says that the "Seller [Zuckerberg] agrees to maintain and act as the sites webmaster and to pay for all domain and hosting expenses from the funds received."
- gscott 16y ago
  It still seems to be a weak point in the contract. Expenses grew beyond what the investor was putting in.

hristov 16y ago

I think it is pretty certain that if Ceglia wins this the results for the tech start up industry will be pretty bad. Facebook shares have been trading in closed deals for a while and I am sure there are many people that believe that they have millions or even billions of dollars in their facebook shares. If this guy wins all of these shares may lose more than 80% of their value. (This is not necessarily the case, but there is a marked possibility). This will be felt in the VC industry, believe you me. The VC and angel investor industry relies on the big payoff and if the biggest payoff in recent history turns out to be a dud, then there will be much less demand for new investments and the few investors that remain will insist even more on professional CEOs to swoop in and take things over. So this is something to think about. Of course, it does not mean he should not get the shares if he has a right to them legally, but the repercussions of this can be huge.

rockfile4 16y ago
I'm not sure where the (80%) comes from, but investors will only lose value if the total value of Facebook declines. If it turns out that Ceglia and Zuckerberg each owned 50% of Facebook in 2003, their ownership would each be diluted down in subsequent rounds of financing (from the "Investors"). So if the equity capitalization before this lawsuit is assumed to be "Investors" - 40% and Zuckerberg - 60% (an example), the new capitalization if Ceglia wins would be Investors 40%, Zuckerberg 30% and Ceglia 30%. No impact on "Investors" ownership.
- infinite8s 16y ago
  Except future rounds of capitalization might be invalid since Zuckerberg didn't have the legal right to dilute the shares he didn't own.
  - deleted 16y ago
    [deleted]
  - charleyrock 16y ago
    First, that comment is so vague that it doesn't mean much and second, who in their right mind would want those rounds of financing to be invalid? This case is irrelevant - it will either be dismissed or settled and will have ZERO impact on valuation or otherwise on existing investors.