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Here's the Email That Could Cost Mark Zuckerberg Half of Facebook
- EGreg 16y agoHow does this prove that the emails were about facebook, and not some other site? I guess facebook isn't going to use that angle, though.
- ohashi 16y agoAs fascinating as it is, people from Business Week and Reuters commenting that they 'look real' seems silly. Pure speculation, unless those guys and linguists who have studied Zuckerberg's writing and style and compared it to the email, their opinion means exactly nothing. I thought that really detracted from the whole thing.
- notahacker 16y agoOccam's razor time: Ceglia was according to that email full of ideas for Facebook until it started getting publicity, at which point he promptly forgot about it for several years... If you're not looking for an interesting story angle, the posted examples look less plausible than the original contract.
- robryan 16y agoEven if they are real can someone really claim 50% ownership after this period of time? Surely the ownership would have to be backdated to around his last involvement with the company, which would be miniscule compared with Facebook's valuation today.
- sunchild 16y agoAnyone can contract for anything, unless it's against public policy in the form of a law.
- ZachPruckowski 16y ago>"Surely the ownership would have to be backdated to around his last involvement with the company, which would be miniscule compared with Facebook's valuation today." That would be a HUGE amount of money. Even if the subsequent investments are still legit (despite not having the involvement of the main investor), Zuckerberg owns like 30% of Facebook, so if you assume the primary investor wouldn't have gotten diluted worse than Zuckerberg, you're looking at tens of billions. Even if he gets diluted as bad as Saverin did (down to 1/7th), that's still like $5 billion or so, right? That's shit-tons of money.
- robryan 16y agoWhat I meant was the value of the company at the time, although I'm not sure how that would work legally.
- yakto 16y agoDo you know how equity works?
- ZachPruckowski 16y agoYeah, that's not how equity investing works. Even if you assume he had the worst in terms of anti-dilution provisions, that's still gonna be like 5% of a $50B company. If he gets Zuck's anti-dilution provisions, that's more like 20-25% of a $50B company.
- robryan 16y agoI think what I said came out bad, what I mean is if the question of ownership was at a certain value, as in the value at the alleged time of sale can you really lay a challenge on it at any future point in the company for say that 5% diluted equity. Seems to leave the door open for people to create technicalities in deals and then treat it as a risk free investment, if they can challenge for it back at any time into the future.
- ZachPruckowski 16y ago
- pathik 16y agoDon't know if it's true or not, but if it is, Paul Ceglia could be the greatest early investor of all time, at least in terms of returns.
- jdavid 16y agoThere are a lot of powerful people that probably do not want the control of facebook to be questionable.
- sunchild 16y agoI remember seeing these emails when this story broke. IAAL, and it looked to me like this is a colorable claim (without predicting its eventual outcome). It was weird to me that journalists and tech commentators dismissed it so readily at that time.
- msh 16y agoIts really easy to fake some emails, and it seems wierd to wait seven years to come forward with the claim. In addition the person isn't exactly the most trustworthy.
- webwright 16y agoSeems pretty dismiss-able to me... 1) The guy said it took so long for him to come forward because he "forgot" about the contract/emails. 2) Selling 50% of the company for $2k seems like an odd move... I don't know my facebook history perfectly, but didn't Zuck have a business partner with a lot of money already? 3) The guy has a history of fraud convictions.
- sunchild 16y agoDoesn't change the fact that it's a colorable claim. It doesn't look to me like any of the defenses you list would lead to summary judgment based on the facts.
- mattdeboard 16y agoBeing convicted of a felony does not make you forever an untrustworthy lout, nor a compulsive, criminal liar. It means you committed a crime once and were prosecuted for it.
- afterburner 16y agoIf the conviction is for fraud, and it seems like the current case might be fraud, then it's a little more relevant.
- webwright 16y ago
- deleted 16y ago[deleted]
- tedunangst 16y agoThere's something about a lawsuit "building buzz" that disturbs me.
- rgrieselhuber 16y agoRidiculous. Did this guy ever show up in a cap table anywhere? He would be diluted into obscurity by now.
- Gaussian 16y agoWhy would that be the case? If he had 50% back then -- same as MZ -- his stake would still be worth billions.
- rgrieselhuber 16y agoZuck has probably (though I don't know for sure) been getting refreshed along the way.
- davidu 16y agoFalse.
- brown9-2 16y agoWhy is there a presumption of truth in regards to emails like this, especially when coming from someone previously convicted of fraud?
- lotusleaf1987 16y agoFrom the article: People now reading the emails are beginning to take them very seriously. "The emails don't read 'fake,' writes Henry Blodget at Business Insider. Felix Salmon at Reuters agrees. "The emails Facebook says are fake don't seem that way to me." In any event, everyone agrees that, if the emails are fake, it should be easy for Facebook to demonstrate that. "Facebook almost certainly has a forensic analysis of Mark Zuckerberg's hard drives and email boxes from this period, because these drives would have been the same ones analyzed in the Winklevoss lawsuit," writes Blodget. "Perhaps the drives show different versions of the emails in question--or no emails at all."
- brown9-2 16y agoThis is precisely what I am referring to: The emails don't read 'fake,' writes Henry Blodget Felix Salmon at Reuters agrees. "The emails Facebook says are fake don't seem that way to me." Why does this matter? How it "seems" or "reads" to online commentators is irrelevant. What are these opinions based on - gut feelings?
- lotusleaf1987 16y ago|Why does this matter? How it "seems" or "reads" to online commentators is irrelevant. What are these opinions based on - gut feelings? The reason it matters to most is transitive trust. Most people trust Reuters/Business Insider as more authoritative than themselves so if Reuters and BI signal that they are suspicious, then the public will be. If people begin to lose trust in Zuck, then they lose trust in FB then...
- cynicalkane 16y agoCareful--this is the same logic behind the demands for Obama's birth certificate. People and entities should in general not be obligated to defend every ridiculous claim that comes their way.
- Construct 16y agoFirst, Ceglia (who was previously convicted of fraud) waits 7 years to file this lawsuit. Now he releases a new batch of e-mails that bolster his story, which were conveniently omitted from his first round of accusations? This is enormously suspicious across the board. It should be ignored as an annoyance and nothing else until a court finds otherwise.
- lotusleaf1987 16y agoI really don't think anyone just from reading the article(s) about the situation has enough information to know for sure.
- irahul 16y agoAnd that's pretty much the point. It's the article which is claiming "emails don't appear fake" and "it looks real". Unless its proven that the mails are real, FB shouldn't be harassed over it. If they don't have the forensic to prove it real or otherwise, shouldn't FB be getting the benefit of doubt since the guy is a convicted felon, remain silent for years, suspiciously came up with new mails months after initial lawsuit, seems excited about FB(the site he is talking about) and then goes dormant for 7 years...
- lotusleaf1987 16y agoAt the same time, that's a very prejudicial stance to take-- that anyone ever convicted of a crime is forever untrustworthy. Look at Tim Allen, he was a coke dealer going away for life who then turned state's witness, turned in all his accomplices and now he's in Toy Story trilogies. I'm taking no stance until actual evidence comes forward or this goes to court and the emails in question can be examined and verified, if possible.
- kovar 16y agoYou often need to go through the discovery process to determine what is real and what isn't. To go through discovery, you need to file a suit. Just because someone is a convicted felon doesn't mean they're not entitled to the same access to the judicial system as everyone else.
- deleted 16y ago[deleted]
- bretthopper 16y agoIf only Facebook had implemented his Christian Corner(TM) idea. They'd be worth billions by now. Maybe Twitter can use it instead.
- ajays 16y agoThis is impossible! Zuck promised _me_ half of the company back in 2004. Here's the email: -------------- Dear Ajays, Thanks for the beers last night, and giving me all the ideas for "The Facebook". I feel your contribution is equal to mine, and so should your ownership. I hope 50% ownership of The Facebook is acceptable to you? Mark PS: Don't mention this on HackerNews, they may not believe you. -------------- Damn you, Zuck!
- deleted 16y ago[deleted]
- Gaussian 16y agoSomebody will package this whole thing--along with the rest the question marks from Facebook's nascent days--into a banal biz school class: "How to avoid squishy Facebook problems."
- zyfo 16y agoif the emails are fake, it should be easy for Facebook to demonstrate that. How? It's easy for FB to demonstrate that the emails are real, but not the opposite. Even if Zuckerberg didn't Delete the emails himself, it is in the interest of FB to show no trace of emails. Suppose FB shows no trace of emails, what does it matter? If Ceglia can show that the emails are indeed real, then that trumps FB. Or am I missing something here?
- lotusleaf1987 16y ago|Suppose FB shows no trace of emails, what does it matter? If Ceglia can show that the emails are indeed real, then that trumps FB. Or am I missing something here? If Ceglia can and does prove that the emails are real and FB is left claiming they couldn't find the emails, it's going to look to most like FB knew it had something to lose all along and that will immediately give Ceglia's claim is more validity. Learn from Nixon, the coverup is usually worse than the offense. Facebook should be as open as they can.
- pkteison 16y agoWhy? One of my big problems with society these days is that honesty often doesn't appear to pay. Upside of successful coverup: Facebook saves billions. Downside of failed coverup: Facebook loses billions. Downside of being honest: Facebook loses about the same amount of billions as if they failed at a coverup.
- mbreese 16y agoAnother downside: being convicted of fraud. Governments tend to not like it when you lie to them. People go to jail, lose legal licenses, etc... Society may not care about honesty, but the courts certainly do.
- showerst 16y agoIt may be in the interest of FB to show no trace, but it would require a fair number of people breaking a bunch of laws. As the article pointed out, they've already done discovery/forensic analysis on these drives. Tampering with that would be a MAJOR crime by everyone involved.
- FreshCode 16y agoHow do I downvote paparazzi stories with linkbait titles?
- Terretta 16y agoClick "flag".
- kenjackson 16y agoThe problem for MZ is he apparently did deal with this guy on StreetFax. MZ and his attorneys have conceeded that point. So its not like this is some guy who has never actually talked to MZ. Second, MZ has a credibility problem. He has a reputation of duping people, or at least not playing it straight. While a lot of people give him credit for being able to use some good tactics to screw over people, those same tactics can also end up biting you too. I don't know if the emails are credible or not, but I'd take them seriously.
- Kallikrates 16y agoI also doubt DLA Piper would file this without some due diligence
- nomurrcy 16y agoI'm not saying that Mr. Ceglia is right, but the amount of people on this thread outright dismissing his claims is laughable. He has now had his claims vetted by at least one major law firm. I guarantee you they looked closely at his claims (they have both a legal and financial interest to do so) and found them worth pursuing. The risk to Zuckerberg is probably a lot higher here than most people think.
- vessenes 16y agoI predicted when this first came out that Zuck would have to settle, and out of pocket, but not for 'in the billions.' I still believe that after reading these emails. You have to remember that a law firm is going to ask itself about total dollar outcome, not necessarily veracity of all claims. Even a 1% chance of partial success is enough to pay for quite a lot of litigation.
- gergles 16y agoAny "major law firm" will go after someone as long as your checks keep clearing. The weight of a law firm is not related to the likely validity of the claims. I mean, if you think you can get a 50% stake in Facebook, of course you're going to pursue that heavily, even if your evidence is weak -- because you might be able to beat FB around until they give you money to make you go away.
- freshfunk 16y agoYes, and based on this how much do you think the legal costs would be for a firm like DLA Piper? You're easily talking about millions. If Ceglia has that amount of money to throw around, I don't think he'd be spending his time with frivolous lawsuits.
- nomurrcy 16y agoI'm betting they took this on contingency and will take a cut of the winnings. If so the firm is willing to risk their own capital.
- ErrantX 16y agoThe emails don't read 'fake,' writes Henry Blodget Really. How exactly? Blodget appears to qualify this claim (in the Business Insider article) by basically saying "well, they haven't been proven fake yet, so we are suspicious that means they are real". Ahem. To me (bearing in mind I'm theoretically supposed to be good at this stuff :D) they look like they are probably faked. The language similarities between the two examples are extremely telling; for example, the odd punctuation (or lack of) visible in both emails strikes me as identical. I think "suspicious until proven real" is the right approach here.
- aresant 16y agoFrom the business insider article "[if they were fake] we imagine DLA Piper's investigators would already have exposed it" I agree w/Biz Insider - A big tech law firm that is almost certainly working on contingency rather than billing $500/hr is a fair indication that there's some meat to this case.
- ErrantX 16y agoYes... but still sceptical. I'd like to know what due diligence was done, and by whom. And exactly what they did (i.e. to the computers, these emails etc.). It would certainly be possible to fool someone that such emails were legit depending on what sort of verification job they did.
- Kallikrates 16y agohardrive data and forensic analysis from this time period exist as part of the Winklevoss lawsuit.
- ErrantX 16y agoAre these emails from those HDD's? If not, where are they from? Have they been subjected to forensic investigation? Has the source been substantiated? Was the due diligence done on these emails, specifically? I'm a cynic about such things though :)
- shareme 16y agoThe problem here is it is somewhat obvious that someone waited until FB was worth something before putting out the legal claim(the lawsuit)..What? Look at the tone of the emails back and forth between MZ and claimant...given that tone would not a reasonable person make a legal claim when FB moved to CA? That means there is quite a bit missing in the story on both sides...so it comes down to who has the most to loose...FB or claimant.. Since FB has the most to loose if this gets into full court hearings I see FB making an attempt to settle..Why? FB at several 100 billion dollars in valuation probably does not need the disclosure that valuation may be in error due to past behavior of the founder/CEO not to mention the obvious decrease in stakeholders values if the claim is true.
- freshfunk 16y agoWaiting until a company is worth something in order to file a lawsuit like this is neither a problem nor illegal. In fact, it's great strategy. If it's true, I don't think he deserves 50% or 80%. It's up to the courts. Also, I think Facebook is what it is today solely because of Zuck and the FB team. But I don't see a problem with waiting to file a claim.
- cpeterso 16y agoWaiting for FB to be worth something before pushing the lawsuit makes sense. Why would he bother if it wasn't worth anything?
- lukeschlather 16y agoThe Zuckerberg in that email sounds exactly like the Zuckerberg in "The Social Network." In other words, like a fabrication.
- EGreg 16y agoThis is why you should use echosign. So you can prove things through a third party that keeps records!
- andjones 16y agoMark Zuckerberg no longer owns 50% of the outstanding Facebook stock. He personally couldn't lose half of Facebook even if he wanted to?
- joshes 16y agoHe could lose half of his share, I believe.
- beeeph 16y agoIt's weird to me that every other commenter on this thread mentions some point about Paul Ceglia's fraud record, as if Zuckerberg is some angel with a clean background. IMHO, Ceglia's fraud record is a completely separate incident and shouldn't be mentioned at all, but if you are going to use it to defend your stance, you should also mention Zuckerberg and his world-famous history of lying, stealing, and screwing people out of what they were contractually promised.
- pedalpete 16y agoDoes any of this really matter? Since when is an email a legally binding contract in ownership of a company?