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Comment by samwillis | Hacker News Reader

I would usually argue that there is no way the Facebook/Meta would die (it almost certainly wont) and so the question is redundant.

However because of the way Meta share ownership is structured Zuckerberg has complete control and the board/shareholders cannot eject him. Most (every?) other public company would go through multiple leadership changes over their lifetime as shareholders exert control. Zuckerberg seems to believe he is going to remain in total control forever, so who knows? Maybe one day the fact shareholders have no control will come back to bite him and the the share price will drop through the floor as confidence in him plumes to zero. Frankly maybe the last 48hours could be indicative of that.

In most companies the board would have required the resignation of the CEO after the historically bad results yesterday.

I suppose in some ways shares in Meta aren't really shares in Meta but shares in Zuckerberg himself.

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Fascinating. Looking forward to when Zuck hits his mid 40s and ends up self-immolating Meta in the most glorious mid-life crisis the world has ever seen.

[Source: I'm in my 40s and could easily imagine cratering a trillion dollar company I created in a quixotic quest to make the world a better place.]

Frankly, I think the whole Meta rebranding seems like a bit of a manic impulsive decision. Of course I know there is more to it than that but there's a not insignificant chance that it was the turning point in the company's decline, if the whole Oculus/metaverse thing doesn't in fact play out in the next couple years.

You could be on to something there, "he" has just "rebranded" and asked us to refer to himself under a "cool" new name and new look. Plus he is trying to start the cult of the Metaverse where we will all transcend to a new plane of existence... this does sound a lot like a mid life crisis to me.

He might just voluntarily step away for his mid-life crisis, the way Page, Brin, Bezos, Ellison, and Gates have.

I figured a similar dynamic existed when Google did their Class-A/Class-C split. Brin, Page, and Schmidt together hold voting control of the company, so I could envision a future where investors tried to buy up all the Class-A shares and enlist the cooperation of one of the founders to oust the remaining founder. For a long time I held onto my Class-A shares and sold the Class-C ones in case the voting rights premium spiked. But that didn't happen: they've all stepped away from operational roles at the company and in Schmidt's case even resigned from the board. Now the Class-A and Class-C shares largely trade in parallel, and in some cases Class-A even trades below C (which is slightly insane since they are strictly better, but market fluctuations).

Holy cow, now I'm waiting for that too!

>In most companies the board would have required the resignation of the CEO after the historically bad results yesterday

That's a strong claim. The stock only dropped 25%, other tech company stocks have dropped as much as 50% in the last few quarters (Snap, DocuSign, etc.) and haven't changed leadership.

Yeah Netflix had a big post-earnings drop, too, and Reed Hastings ain't going anywhere.

Meta literally made the history books yesterday with the larges one day drop in market capitalisation of any company in history. That's $200B of shareholder value wiped out. If I was an intuitional investor I would be asking for his resignation.

https://www.bloomberg.com/news/articles/2022-02-03/meta-set-...

1 basic move and they'll likely have 3 more Oculus sales off of me (we already have 1). No Facebook account required, just a typical account that requires no proof of identity or ties to my personal identity in any way. Just like I can sign up for Steam, XBox, Epic, Nintendo, Blizzard, and every other damn service without it. My sister just told me the other day she'd probably get 2 if it weren't for that, she doesn't even game on other platforms. There has to be tons of people holding out because of it. The move was infinitely stupid.

because of the way Meta share ownership is structured Zuckerberg has complete control and the board/shareholders cannot eject him

Tech companies are notoriously bad at succession planning.

Car crash. Plane crash. Heart attack. Stroke. Slippery floor on your super-yacht.

There are a million ways for a CEO's tenure to suddenly and unexpectedly end. Yet the heads of these companies still act like nothing will ever change, even when they're old enough to know better.

Many of them are actually pretty good at succession planning: Gates, Page, and Jobs all hand-picked their successor, and had a long apprenticeship period where the successor served in a COO role and basically ran the business while the previous CEO oversaw.

The problem is that the tech business is fundamentally innovation-based, and this means that anyone capable of running the business as #2 is probably unsuitable to be #1. There's a classic a16z essay about this:

https://a16z.com/2010/12/16/ones-and-twos/

Basically, the personality traits to be a successful functional executive and those needed to be a successful tech CEO are often diametrically opposed. So if you pull from the existing exec team, your best case is that you get a caretaker (like Ballmer, Pichai, or Cook) who runs the business, optimizes earnings, keeps people happy, but misses the next tech cycle and eventually mortgages the company's future. Your worst case is that everyone quits and the company implodes because it can't service its existing commitments.

This is why you want to be a financier. Sell the companies at the top of their growth curve and fund the up-and-comers that will eat their lunch.

> However because of the way Meta share ownership is structured Zuckerberg has complete control

How is it structured at a quick brief high level? Just the common "he owns 50.1% of the company in terms of # shares?"

Zuckerberg holds around 60% of control*, see https://www.sec.gov/Archives/edgar/data/1326801/000132680118... at page 38

He owns a different type of share from the common stock which gives him extra voting power. Each share he owns gives him 10 votes, and each share that you can buy gives you 1 vote.

He set it up that way to give him control of the company forever.

Source: https://www.morningstar.com/articles/1061237/how-facebook-si...

> The Facebook shares that you and I, along with big investors like mutual funds, can buy are Class A shares, of which there are roughly 2.4 billion in the market. We get one vote for each share. But Zuckerberg and a select group of others own Class B shares, which afford them 10 votes per share. There are roughly 440 million Class B shares.

>Zuckerberg personally owns nearly 360 million Class B shares, and through agreements with other Class B shareholders, controls the vote of another 32 million. That gives him control of some 392 million Class B Shares, some 90% of the total.

Multiple classes of share with different voting rights, so while he doesn't own 50.1% of the company he does have overall voting control of the company.

https://www.morningstar.com/articles/1061237/how-facebook-si...

Zuck has priority shares that have like 10x voting rights. Even if he only has a small percent of the shares he will be in control.

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