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Chart of the Day: Facebook boss wants your money not your vote

Facebook’s chief executive, chairman, founder, paper billionaire and face, the 27-year-old Mark Zuckerberg, will retain major control of the company once it floats on the stock market.

by Chris Marshall on Feb 02, 2012 at 11:04

Facebook must be the only company in history to use claims of '100 billion friendships' to entice investors to take part in its stock market listing.

The incredibly successful social networking company's flotation registration form shows off with tables like this:

Please visit our full site to view this interactive chart

Facebook, which is seeking to raise $5 billion (£3.2 billion) when it lists later this year, recorded an 88% rise in revenues to $3.7 billion last year, the SEC submission reminds us.

But then, it also contains a few stats that are alarming corporate governance experts.

Please visit our full site to view this interactive chart

Facebook’s chief executive, chairman, founder, paper billionaire and face, the 27-year-old Mark Zuckerberg, has 56.9% of voting power having implemented a share class structure that leveraged up the clout his 28.2% shareholding would normally give him.

Speaking to Bloomberg, Charles Elson, a University of Delaware corporate-governance professor, was clear what this means: ‘The public has no say in the control of the board, which in my view is terribly harmful to any notion of accountability.’

This apparently is a technique common to recently listed tech companies as the Silicon Valley whiz-kids don’t want to cede control in the companies they created in their bedrooms. ‘It’s very troubling to investors, and it’s a bad bet for them,’ Elson added.

13 comments so far. Why not have your say?

Joe Stirling

Feb 02, 2012 at 12:42

Mark his urname:

Zuckerberg (German for Sugarmountain): says it all!

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Peter Young Engineer

Feb 02, 2012 at 12:55

His arrogance is astounding.

Why does anyone have the need for a Facebook account. I think many people will realise the error of using but it will be too late!!!

Get a life!!

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Martin Drew

Feb 02, 2012 at 15:48

Yeah, I agree - it is a bit like reading magazines like Hello or OK, rather illustrates you are a boring person who hasn't got a life and so has to live your life through someone else's. It's a wierd world we live in right now and I wouldn't be surprised to see Facebook crash and burn. Alta Vista, Friends Reunited, Geocities, AOL, Excite - all were once the hottest thing on the Internet and where are they all now?

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Ali B

Feb 02, 2012 at 17:08

Its called the future, stop living in the past.

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Martin Drew

Feb 02, 2012 at 18:39

Possibly Ali B, but just maybe Facebook is already edging into the past itself. Sign ups in the US and UK have already peaked, growth now is in developing economies. This much delayed float might be ideally timed for the early investors to get back their stake with a handsome profit and leave those who get in at the IPO to take the pain over the next few years as something else supercedes it.

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Eddie Merryweather

Feb 02, 2012 at 18:39

Martin you have a great life i suppose, you got nothing better to do than write a comment on this then ??? i agree with you though.

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ray jones

Feb 03, 2012 at 01:34

I think it is disgusting fort his paper billionaire to discriminate women not having a single sit on the board

I do not buy his share we are living in a modern society and women should be treated with respect as high percentage of facebook participants are women.

So ladies boycott this venture and recognize this inequalities.

RR

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Anonymous 1 needed this 'off the record'

Feb 03, 2012 at 02:05

Facebook is an ardently feminist organization, and the S-1 filing specifically mentions Sheryl Sandberg as being critical to the company.

I agree, boycott Facebook -- not because they discriminate against women, but because they pander to them!

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Not all ETF's are the same

Feb 03, 2012 at 10:14

The first chart looks remarkably like the returns achieved from Madoff's hedge fund....

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Tinkerbell

Feb 03, 2012 at 16:28

Facebook is here to stay - it has become an inherent part of peoples lives.

I don't think it discriminates against or panders to women - it just makes organising our social lives and keeping up with distant friends a lot easier.

Personally I think Mark Zuckerberg has every right to keep the majority shareholding - I would if I had created it!

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Neil Liversidge

Feb 03, 2012 at 22:23

@ all those who issue blanket denunciations of Facebook users - what a load of ignorant pompous tripe. People who have a life and don't need to 'get one' have Facebook accounts because it's a convenient way to stay in touch with ones friends worldwide, simple as. I have friends on every continent through my involvement in motorcycling and business, and they're almost all on Facebook. No doubt those of your ilk said the same of the telephone a hundred years ago. You're obviously just jealous because WE have a life AND friends!

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Peter Young Engineer

Feb 06, 2012 at 08:18

Email does it for me.

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S G

Feb 06, 2012 at 09:19

I use facebook to keep in contact with friends and arrange social/sporting/hobbie events.

This includes everything from Sailing, Diving, Paint Ball, Pub Quiz nights, Judo and BBQs, so to say users

of FB have no lives just shows how dumb and ignorant some people are…….

If I didn’t use facebook, gone knows how many hours it would take me contacting everyone, and how much that would cost

in phone calls etc…..

After the events it lets my friends and I share photos and videos, we might never have seen.

One argument I haven’t seen in this thread yet, is privacy….. Nothing is making people put the information

On facebook, I have minimal data on mine, and even that is very generic……..

With regards to ownership, fair play, if I built a company from the ground I would want to be in total control of it.

Nothing worse then building some from nothing over years and years of hard work to then be told to go……

Facebook as got a very good strong hold in the market, as most people are on it, I for one don’t see myself moving to

Another social network, have to re add all my friends, photo’s videos etc………….

An interesting question is it too big to fail? Can it fail? Will any other site be able to compete? What can another site

offer that FB cant?

Is the user base going to keep growing and growing??

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