Facebook Abandons Plans to Change Share Structure, Avoiding Lawsuit
September 22 2017 - 5:44PM
Dow Jones News
By Deepa Seetharaman and Sarah E. Needleman
Facebook Inc. on Friday abruptly abandoned its plan to change
the company's stock structure, heading off an impending public
trial as the social-media giant grapples with other
controversies.
Chief Executive Mark Zuckerberg said the recent rise in
Facebook's stock price allows him to retain control of Facebook for
at least 20 years with the current two-class share structure.
Facebook shares have risen more than 50% since April 2016, when the
plan was first announced.
Mr. Zuckerberg said he plans to accelerate the sale of shares to
fund the Chan Zuckerberg Initiative, a for-profit entity that
allows him to donate to charitable causes and invest in companies
that further a global mission.
"We now plan to accelerate our work and sell more of those
shares sooner, " Mr. Zuckerberg said, in a blog post Friday. He now
expects to sell between 35 million and 75 million Facebook shares
over the next 18 months "to fund our work in education, science,
and advocacy."
A trial had been scheduled to start Tuesday in Delaware with
testimony from Mr. Zuckerberg. He was expected to defend against
plaintiffs' claims that conflicts of interest and other problems
tainted a board decision to create a new class of shares aimed at
ensuring the Facebook co-founder's continued control of the
company, even as he gave away 99% of his family's wealth over his
lifetime.
An administrator for the Delaware Chancery Court sent an email
Friday afternoon saying the trial was "canceled due to a
settlement."
(END) Dow Jones Newswires
September 22, 2017 17:29 ET (21:29 GMT)
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