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Shake down is a completely unfair characterization of what's happening here. Facebook is being sued because they're alleged to be damaging their shareholders i

Shake down is a completely unfair characterization of what's happening here. Facebook is being sued because they're alleged to be damaging their shareholders in three ways. 1. They're using corporate funds to protect Zuckerberg personally. 2. They're in violation of an FTC Consent Decree relating to Cambridge Analytica which poses a material risk to shareholders as there are financial penalties for violating the agreement. 3. They're misleading Government and Customers about what data they're collecting and how they're protecting it, which opens them up to more lawsuits and further puts shareholders at risk. Running a public company is a two-way street. If you want access to public financing and the ability to shield individuals from personal financial/legal risk, you need to abide by certain rules relating to reporting and transparency. If you don't want to be transparent, you don't have to IPO.

jonahbenton 5y ago
Yes. There are many other threads being pulled here as well. Another is the indication of evidence of criminal acts by executives and the Board- insider trading. From a long term perspective, the only potential significant outcome of this activity is Zuck being forced to divest.
gbasin 5y ago
Pretty sure their shareholders are doing just fine :D
willvarfar 5y ago
It's a shake down if the plaintiffs (who in this case are pension funds with big amounts of shares? When I first read the article, where it talked about Rhode Island etc, I assumed it was a state and not their pension fund) are just going to settle for some money in return for shutting up and letting everything continue as normal afterwards?
- voxic11 5y ago
  Why would shareholders sue the company they own shares in if their goal was to get a payout? Surely when the company reports such a payout the share value will reflect that. It seems like this case should be taken at face value, the shareholders want the company to change its behavior so that their shares can be worth more in the future.
  - nybble41 5y ago
    If all the shareholders were to sue and divide the payout according to the number of shares they hold then yes, that would be a losing proposition. If only some of the shareholders sue, however, the payout from the suit might exceed the drop in the value of their own shares, at the expense of other shareholders who are not parties to the suit.

jonahbenton 5y ago

Yes. There are many other threads being pulled here as well. Another is the indication of evidence of criminal acts by executives and the Board- insider trading. From a long term perspective, the only potential significant outcome of this activity is Zuck being forced to divest.

gbasin 5y ago

Pretty sure their shareholders are doing just fine :D

willvarfar 5y ago

It's a shake down if the plaintiffs (who in this case are pension funds with big amounts of shares? When I first read the article, where it talked about Rhode Island etc, I assumed it was a state and not their pension fund) are just going to settle for some money in return for shutting up and letting everything continue as normal afterwards?

voxic11 5y ago
Why would shareholders sue the company they own shares in if their goal was to get a payout? Surely when the company reports such a payout the share value will reflect that. It seems like this case should be taken at face value, the shareholders want the company to change its behavior so that their shares can be worth more in the future.
- nybble41 5y ago
  If all the shareholders were to sue and divide the payout according to the number of shares they hold then yes, that would be a losing proposition. If only some of the shareholders sue, however, the payout from the suit might exceed the drop in the value of their own shares, at the expense of other shareholders who are not parties to the suit.