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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

by 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 hristov 16y ago

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.