Mark Zuckerberg’s Facebook Class C Stock Lawsuit

Mark Zuckerberg wants Facebook to create a Class C of stock (a third class class in the capitalization structure) with non-voting rights so that he can sell billions of dollars worth of FB stock in the coming years so that he can maintain the 60% voting power in Facebook that will effectively allow him to personally keep control of Facebook even while gradually draining his equity investment in the social media corporation.

Facebook shareholders Eric McGinty and Eric Levy separately launched class action lawsuits two days after the April 27th Class C stock announcement alleging that Zuckerberg and the Facebook Board of Directors violated their fiduciary duty of loyalty to the shareholders by engaging in a conflict of interest transaction that gives Zuckerberg the benefit of entrenchment without giving the adversely affected voting rights of the remaining shareholders the benefit of a bargain. The reason why it is a class … Read the rest of this article!