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The biggest problem is that there are no stockholder rights in Meta (just like Zynga, Google and many other ones). Zuckerbergs owns less than 50% of the compan

by sireat 4y ago

The biggest problem is that there are no stockholder rights in Meta (just like Zynga, Google and many other ones). Zuckerbergs owns less than 50% of the company but he can do whatever he wants and no activist investor has any say. Owning these Class-A shares (why not call them class Z?) is worth 1/10 as much as owning class B shares that Mark and his cronies own. The multiple voting share structure is an abomination and perversion of stock market. The old way was at least more honest. Regular shares -> most risk, most profit, actual voting rights Preferred shares -> less risk, some profit, no voting (what Class A should be) Bonds -> least risk, set yield, highest preference at liquidation

Cupertino95014 4y ago
Totally true. This isn't unique to Meta, as you noted. Investors can choose to avoid these shares, of course, since they're missing the "possible takeover premium." In the old days, they would have. I don't see Elizabeth Warren or Bernie Sanders crusading against this, by the way.
- dundarious 4y ago
  Bit of a curveball mention of Warren and Sanders there, the latter of whom is certainly focused on what he sees as far bigger issues. But the Norwegian Sovereign Wealth Fund, which he has mentioned favorably as a potential model for the US, does recommend against investing in companies with these types of share arrangements unless they have a sunset date (their analysis is that there is a benefit to giving founders control but that it diminishes and becomes a detriment over time). Matt Bruenig/People’s Policy Project has written on the topic also.
  - Cupertino95014 4y ago
    Thanks. It's certainly a flaw in capitalism, isn't it? A founder wants the public's money, but doesn't want them to exercise ownership. There are lots of private companies. Going public is not the only way to get liquidity. So I would say, as John Q. Investor, "If you get my money, I get to vote to fire you."
    - dundarious 4y ago
      To be perfectly honest, by saying "curveball" I wasn't complimenting your reference to them, I was saying it was unexpected and confusing (as in hard to comprehend how or why you arrived at it). But I mostly agree with your comments here.

by sireat 4y ago

Cupertino95014 4y ago

Totally true. This isn't unique to Meta, as you noted. Investors can choose to avoid these shares, of course, since they're missing the "possible takeover premium." In the old days, they would have. I don't see Elizabeth Warren or Bernie Sanders crusading against this, by the way.

dundarious 4y ago
Bit of a curveball mention of Warren and Sanders there, the latter of whom is certainly focused on what he sees as far bigger issues. But the Norwegian Sovereign Wealth Fund, which he has mentioned favorably as a potential model for the US, does recommend against investing in companies with these types of share arrangements unless they have a sunset date (their analysis is that there is a benefit to giving founders control but that it diminishes and becomes a detriment over time). Matt Bruenig/People’s Policy Project has written on the topic also.
- Cupertino95014 4y ago
  Thanks. It's certainly a flaw in capitalism, isn't it? A founder wants the public's money, but doesn't want them to exercise ownership. There are lots of private companies. Going public is not the only way to get liquidity. So I would say, as John Q. Investor, "If you get my money, I get to vote to fire you."
  - dundarious 4y ago
    To be perfectly honest, by saying "curveball" I wasn't complimenting your reference to them, I was saying it was unexpected and confusing (as in hard to comprehend how or why you arrived at it). But I mostly agree with your comments here.