Major Facebook Risk: Mark Zuckerberg


Everyone is talking about the recent S-1 form that Facebook just filled out on the road to being a publicly traded company. There has been much talk about the billions of dollars that everyone is going to make off the company. Everyone is talking about the star studded list of investors that are going to be made even richer by their investment in Facebook.

The one thing that has been overlooked on the form is a little section known as “Risks Related to Our Business and Industry.”. There are 38 listed risks to the company and a few of them are actually really comical.

One of the biggest risks to the Company is Mark Zuckerberg, the company’s founder who invented Facebook in his Harvard dorm room when he was 19.

Why is Zuckerberg such a threat?

The S-1 says,

That Mark Zuckerberg’s bad decision-making could lead to a decline in company value. Along with “users fleeing” and “decline in advertising revenue,” the following was listed as a major risk factor:

Our CEO has control over key decision making as a result of his control of a majority of our voting stock.

Zuckerberg owns 58 percent of Facebook stock, which means that he “has the ability to control the outcome of matters” that come before stockholders. Furthermore:

“As a stockholder, even a controlling stockholder, Mr. Zuckerberg is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements, in his own interests, which may not always be in the interests of our stockholders generally.”

Should stockholders fear the man who controls the company they hold stock in?

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