Facebook CEO drops plans to reclassify
MARK Zuckerberg said that Facebook was withdrawing plans to create a new class of stock that would have let him keep tight rein on the social media company, even as he sold down his stake to fund his philanthropy.
A class-action trial on the matter was due to start next week in Delaware, but was called off with Zuckerberg’s announcement. He had been slated to testify during the trial.
The billionaire chief executive said in a Facebook post that because the value of its stock has grown, he can fully fund the philanthropy while still keeping voting control of the company for “20 years or more”, making the stock-reclassification plan unnecessary. A lawyer representing Facebook shareholders in a lawsuit against the company deemed it a win for clients.
“We’re thrilled that Facebook has dropped the reclassification,” attorney Stuart Grant said.”Today’s move is a total victory for stockholders.” –