Skip to main content

Facebook hit with lawsuit over plan to issue new stock

Facebook logo© Facebook Facebook logo

SAN FRANCISCO - A Facebook Inc shareholder filed a proposed class action lawsuit on Friday in a bid to stop the company's plan to issue new Class C stock, calling the move an unfair deal to entrench Chief Executive Mark Zuckerberg as controlling shareholder.

The lawsuit, filed in the Delaware Court of Chancery, comes two days after the social networking company announced its plan to issue the shares. The rejiggering of Facebook's share structure, effectively a 3-for-1 stock split, follows the 31 year-old's announcement last December that he intends to put 99 percent of his Facebook shares into a new philanthropy project focusing on human potential and equality.

The lawsuit contends that a Facebook board committee which approved the share deal “did not bargain hard” with Zuckerberg “to obtain anything of meaningful value” in exchange for granting Zuckerberg added control.

Representatives for Facebook could not immediately be reached for comment.

Facebook plans to create a new class of shares that are publicly listed but do not have voting rights. Facebook will issue two of the so-called “Class C” shares for each outstanding Class A and Class B share held by shareholders. Those new Class C shares will be publicly traded under a new symbol.

Zuckerberg “wishes to retain this power, while selling off large amounts of his stockholdings, and reaping billions of dollars in proceeds,” the lawsuit said.

“The issuance of the Class C stock will, in effect, have the same effect as a grant to Zuckerberg of billions of dollars in equity, for which he will pay nothing,” it said.

Google settled a lawsuit in 2013 shortly before trial which cleared the way for that company to execute a similar plan. — Reuters

Popular posts from this blog

DOF opposes tiered approach to tax on sugary drinks

© Provided by Mediamerge Corporation MONEY- Tax thumbnail The Department of Finance (DOF) is not amenable to Senator Juan Edgardo Angara's suggestion to implement the proposed levy on sugar sweetened beverages via a three-tier system. "We oppose the tiered approach. Meaning 'yung first seven grams will be tax free and then after that would be taxable," Finance Undersecretary Karl Chua said during the Economic Journalists Association of the Philippines (EJAP) Economic Forum in Manila on Friday. Chua note the tiered approach may compel manufacturers to come up with smaller packaging. "So you can drink three of them with no taxes," the Finance official said. It will defeat the purpose of imposing excise tax on sugary drinks as a health measure, he added. During deliberations on the comprehensive tax reform bill, Angara floated the idea of implementing the excise tax on sugar sweetened beverages under a three-tier system to incentivize those who manufactu...

You can pay at a restaurant by smiling at a camera

© Provided by Engadget As easy as it is to make purchases in the era of tap-to-pay services , it's about to get easier still. Alipay (which handles purchases for Chinese shopping giant Alibaba) has launched what it says is the first payment system that uses facial recognition to complete the sale. If you visit one of KFC's KPRO restaurants in Hangzhou, China, you can pay for your panini or salad by smiling at a camera-equipped kiosk -- you need to verify the purchase on your phone, but you don't have to punch in digits or bring your phone up to an NFC reader. The system (Smile to Pay) is purportedly resistant to spoofing with photos and other tricks. It relies on both depth-sensing cameras and a "likeness detection algorithm" to make sure it's really you. Reportedly, the technology is good enough that it can accurately identify people even when they're disguising themselves through makeup or wigs. You shouldn't have to worry about someone buying ...

Apple named ‘most innovative’ company by a magazine

© Provided by IBT US Apple has just been named as the “Most Innovative” company of 2018 by a business magazine. The reasons cited why the Cupertino giant emerged triumphant on the list included the company’s ability to design processors that are optimized for its latest hardware and software.  Fast Company published Tuesday its list of the World’s Most Innovative Companies 2018 in the consumer electronics sector and Tim Cook’s company was the one that snagged the top spot. The publication indicated in the list that the main reason why Apple ranked the highest was because it produced the “phone of the future” for today’s market.  The magazine also published a lengthy explanation on why Apple is worth the “most innovative” title this year. According to Fast Company, the Cupertino giant had a notable 2017 due to the stellar performances of the wireless AirPods and the Apple Watch Series 3 and the launch of its own AR platform, ARKit, as well as the release of the outst...