Facebook announced yesterday that the proposed move of stock reclassification had been dropped. The social media giant would have strengthened Mark Zuckerberg control over the company. This is seen as a win for major shareholders who had opposed the move since the beginning. According to stocks exerts, Mark Zuckerberg who is the chief executive of Facebook would retain his voting rights despite offloading most of his shares to charitable causes. Should have Facebook failed to drop the case, Mark Zuckerberg could be making a court appearance next week in Delaware. Dropping this lawsuit comes after a series of criticism in various fonts. At the moment, the company has agreed to turn in over 3,000 digital advertisements that are linked to the Russian investigation. At the same time, the company is facing some criticism that some of its ads were used to spread hate messages to the vulnerable. Facebook shareholders were being represented by Grant & Eisenhofer. The law firm released a statement through Stuart Grant who said that they were relieved and thrilled that Facebook had dropped the lawsuit. She also said that the day signified a win for stockholders. Through a statement, Facebook board of directors said that the move was for the best interest of the company and that of its shareholders.
This might be the turning point for technology chief executives who have outsized control in their companies despite offloading their stocks. This is the same with Sergey Brin and Larry Page, the founders of Google. This has also happened with Bobby Murphy and Evan Spiegel, the two are the co-founders of Snap Chat. All these gentlemen possess disproportionate voting powers in the companies they represent. This desire to reclassify the stocks began sometimes back when Mark Zuckerberg and his wife Priscilla Chan welcomed the birth of Maxima. This made them establish the Zuckerberg Initiative that would see them give away their wealth as they age. Through a statement on Facebook, Mark said that it was his idea to help humanity through his stocks and also keep his voting rights in the company. Later on, Mark Zuckerberg and Chan Zuckerberg Initiative spokesman said that due to the current performance of Facebook, the reclassification was no longer necessary. Mark Zuckerberg also said that he had the capability of retaining his voting control at Facebook while funding the philanthropy. He said he could do it for more than 20 years. He plans to sell some of his shares to finance his plans in science and education.