Facebook Inc. scrapped plans to create a new class of shares, a rare victory for outside investors in a battle for control of the world’s largest social media company.
The move would have let Chief Executive Officer Mark Zuckerberg keep voting control even while selling almost all his shares to fund philanthropic endeavors. On Friday, only days before he was scheduled to appear in court over the matter, Mr Zuckerberg said he will proceed without the plan.
The decision follows a rash of technology executives creating special shares to control their companies, and may make similar structures more difficult to put in place in the future.
“Over the past year and a half, Facebook’s business has performed well and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more,” Mr Zuckerberg said. “As a result, I’ve asked our board to withdraw the proposal to reclassify our stock -- and the board has agreed.”
Another part of the proposal, to change the corporate charter to let the billionaire serve in government without losing control of Facebook, was also dropped, the company said.
Even as he gives up plans for a new share class, Mr Zuckerberg is sticking to a goal of giving away 99 percent of the Facebook shares owned by him and his wife, Priscilla Chan. To do that, he intends to sell 35 million to 75m Facebook shares in the coming 18 months to fund pursuits in education, science and advocacy, according to a blog he posted on Friday. That’s equivalent to US$6 billion to $13bn at current prices, and more than Mr Zuckerberg planned to sell earlier.
Mr Zuckerberg would have had to defend the move that some shareholders said diluted their power and was decided without their interests in mind.
"I don’t think this was an enviable position for Mr Zuckerberg,” Stuart Grant, an attorney for plaintiff shareholders at law firm Grant & Eisenhofer, said in an interview. “He was going to have to answer some very tough questions in public."
Appearing in court to defend his decision to maintain control of the company would have come at a bad time for the executive. Mr Zuckerberg is dealing with several political crises, most notably investigations into whether Facebook ads were used by Russia to sow discord ahead of the U.S. presidential election last year.
The shareholder suit described unusual communications between venture capitalist and Facebook board member Marc Andreessen and Mr Zuckerberg. Facebook set up a special board committee to represent shareholders while weighing the share class proposal. While on the committee, Mr Andreessen slipped Mr Zuckerberg information about their progress and concerns, helping the CEO negotiate against them, according to court documents.
Shareholders were aggrieved by the plan. It would have automatically diluted the voting power of existing investors because every share with voting power would have split into three shares -- one that has power, and two that don’t. This would have let Mr Zuckerberg sell his Facebook shares to fund philanthropy, but the non-voting shares were less attractive as currency in acquisitions and may have made it harder for the company to get tax benefits, among other issues.
Mr Zuckerberg isn’t the only tech executive to try this. Alphabet Inc.’s Google issued special Class C stock in 2014, and Snap Inc. sold non-voting shares in an initial public offering this year. Some operators of equity indexes have since banned companies that use multiple share classes.
“This case is important in the ongoing struggle between Silicon Valley and the belief that founders should maintain ultimate control,” Grant said. “Once you ask for public money, that changes.”
Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.
A semen analysis of the father showed abnormal sperm so the couple required IVF.
Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.
A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.
On day three of the process, 14 embryos were biopsied for gender selection.
The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.
Day five of the treatment saw two male embryos transferred to the patient.
The woman recorded a positive pregnancy test two weeks later.
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BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
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THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5