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The best analysis of the lawsuit I've seen comes from grellas' brilliant posts here on HN[1]: http://news.ycombinator.com/item?id=1537158 http://news.ycombinat

by philk 16y ago

The best analysis of the lawsuit I've seen comes from grellas' brilliant posts here on HN[1]: http://news.ycombinator.com/item?id=1537158 http://news.ycombinator.com/item?id=1537158 http://news.ycombinator.com/item?id=1510528 http://news.ycombinator.com/item?id=1510528 [1]Which, as a side note, drives home just how much better HN is than most other places on the internet, we got lengthy analyses, almost everywhere else was overrun with re-phrasings of "Oh boy Zuckerberg's fucked now!".

shalmanese 16y ago
On the other hand, it shows how dismal the entire internet is as a whole that only a single lawyer bothered to provide any form of analysis on the issue here.
codexon 16y ago
I disagree with the doctrine of laches being applied to this case. It doesn't make any sense for Ceglia to risk time and money to sue for a company that has just recently become "cash flow positive" let alone break even. Investors in Facebook should have the concept of "due diligence" applied to them. Trading in pre-IPO stock is not and should not be safeguarded like regular equities or FDIC insured bank deposits. Ultimately this is Zuckerberg's fault, and any settlements from this case should be paid from his assets. I think it all rests on whether or not the statute of limitations started ticking before July 2004. According to New York Civil Practice Law & Rules - § 213, which I believe is pertinent to the case, it mentions "two years from the time the plaintiff...could with reasonable diligence have discovered it".
- philk 16y ago
  I'd suggest that the doctrine of laches is completely valid in this case. Facebook isn't just a company that has "recently become cash flow positive", it's a company that's been highly valued for at least six years. In June 2004 Peter Thiel invested $500K for 7% (giving it a valuation of $7.1M) and Accel Partners invested $12.7M in May 2005 (valuation ~ $100M). I'm not sure you can say it would be a waste of time to sue for ownership of Facebook as it existed at either of those points as it was clearly valued by astute investors.
  - codexon 16y ago
    The problem with that line of thinking is that those valuations would have only been possible with Zuckerberg and his cadre of Harvard branded friends at the helm of Facebook. If Ceglia exercised his right to those shares so early in the stage, those people could have easily been poached by Google or started another company. Just because Peter Thiel and other investors valued it highly doesn't make it so. Would you agree with his investment in largely failed Friendster? No one should be beholden to imaginary valuations by pre-IPO investors who have a higher tolerance for risk.
    - mootothemax 16y ago
      Just because Peter Thiel and other investors valued it highly doesn't make it so. Surely the value of the company's shares is however much investors are willing to pay for them?
      - codexon 16y ago
        That's only true for public shares. $10,000 from Thiel is different from $10,000 from Joe Sixpack.

by philk 16y ago

shalmanese 16y ago

On the other hand, it shows how dismal the entire internet is as a whole that only a single lawyer bothered to provide any form of analysis on the issue here.

codexon 16y ago

I disagree with the doctrine of laches being applied to this case. It doesn't make any sense for Ceglia to risk time and money to sue for a company that has just recently become "cash flow positive" let alone break even. Investors in Facebook should have the concept of "due diligence" applied to them. Trading in pre-IPO stock is not and should not be safeguarded like regular equities or FDIC insured bank deposits. Ultimately this is Zuckerberg's fault, and any settlements from this case should be paid from his assets. I think it all rests on whether or not the statute of limitations started ticking before July 2004. According to New York Civil Practice Law & Rules - § 213, which I believe is pertinent to the case, it mentions "two years from the time the plaintiff...could with reasonable diligence have discovered it".

philk 16y ago
I'd suggest that the doctrine of laches is completely valid in this case. Facebook isn't just a company that has "recently become cash flow positive", it's a company that's been highly valued for at least six years. In June 2004 Peter Thiel invested $500K for 7% (giving it a valuation of $7.1M) and Accel Partners invested $12.7M in May 2005 (valuation ~ $100M). I'm not sure you can say it would be a waste of time to sue for ownership of Facebook as it existed at either of those points as it was clearly valued by astute investors.
- codexon 16y ago
  The problem with that line of thinking is that those valuations would have only been possible with Zuckerberg and his cadre of Harvard branded friends at the helm of Facebook. If Ceglia exercised his right to those shares so early in the stage, those people could have easily been poached by Google or started another company. Just because Peter Thiel and other investors valued it highly doesn't make it so. Would you agree with his investment in largely failed Friendster? No one should be beholden to imaginary valuations by pre-IPO investors who have a higher tolerance for risk.
  - mootothemax 16y ago
    Just because Peter Thiel and other investors valued it highly doesn't make it so. Surely the value of the company's shares is however much investors are willing to pay for them?
    - codexon 16y ago
      That's only true for public shares. $10,000 from Thiel is different from $10,000 from Joe Sixpack.