
Billion-Dollar Facebook Investor Tells Mark Zuckerberg to Quit as Chairman - rakibtg
https://www.independent.co.uk/life-style/gadgets-and-tech/news/facebook-mark-zuckerberg-quit-investor-scott-stringer-a8286451.html
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tschellenbach
I think the author really underestimates how hard it is to stay relevant as a
social network while trends and attitudes shift. So far Facebook's continued
success has been pretty impressive. Some examples of great moves: Adopting
oAuth to make Facebook the backbone of auth on the web, buying instagram when
it was small, moving the company to be mobile first, buying whatsapp and
making messenger a world class experience and now integrating the best
features of Snap to counter that threat. The focus on messaging was especially
brilliant given the current trend that people are moving away from social to a
more messaging focused experience.

It's pretty amazing strategy regardless of how you feel about Facebook's
recent issues. I would wager that >99% of CEOs would have failed to spot those
trends in time and stay relevant.

~~~
Namrog84
Majority of CEOs are older too. I wonder how much this influences a persons
ability to pivot. When certain things work well for you for 20+ years. It can
be hard to change when those very fundamental things need changing. Whereas a
younger ceo might be more willing to experiment (and possibly fail)

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itsdrewmiller
Save you the click - it's the comptroller of NYC who represents a pension
fund. Not sure whether he qualifies as an "investor".

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maxxxxx
Why would he not qualify as an investor?

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vasco
Not his money.

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andrewjl
That disqualifies every institutional investor from being called an investor

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abritinthebay
Unless they are officially speaking on behalf of the fund... yep.

It doesn’t appear that this guy was speaking on behalf of the pension fund,
just personally, so really he isn’t an investor.

~~~
andrewjl
I don't know about that. Institutional investors have a raft of obligations to
their clients, including not doing things like intentionally making their
investment go down in value. This is a complicated topic, hence why securities
law is a thing, but I wouldn't dismiss something an institutional investor
says just because they're not speaking officially. It's still their career,
investment track record, and client obligations on the line.

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poooogles
>We’re not trying to harm Facebook, we’re trying to make it a stronger
company.

Ha. That's a statement and a half. Does answering to shareholders make your
company stronger? Lots would argue that too many shareholders focus on short
term growth over long term strategy.

~~~
dragonwriter
> Lots would argue that too many shareholders focus on short term growth over
> long term strategy.

Large public pension funds are, however, _not_ the kind of shareholders at
which that criticism is usually directed.

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breakpointalpha
I think the bigger story here is the NYC Pension fund holding $895 _million_
in FB stock.

[http://www.pionline.com/article/20180330/ONLINE/180339994/ny...](http://www.pionline.com/article/20180330/ONLINE/180339994/nyc-
comptroller-calls-on-facebook-to-improve-transparency-accountability)

~~~
dragonwriter
The NYC pension funds total nearly $200 billion.

[https://comptroller.nyc.gov/services/financial-
matters/pensi...](https://comptroller.nyc.gov/services/financial-
matters/pension/asset-allocation/)

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thisisit
Parts of yesterday's Zuckerberg interview [0] highlighted and commented by
Matt Levine today [1]:

 _Zuckerberg: You mentioned our governance. One of the things that I feel
really lucky we have is this company structure where, at the end of the day,
it’s a controlled company. We are not at the whims of short-term shareholders.
We can really design these products and decisions with what is going to be in
the best interest of the community over time.

Klein: That is one of the ways Facebook is different, but I can imagine
reading it both ways. On the one hand, your control of voting shares makes you
more insulated from short-term pressures of the market. On the other hand, you
have a lot more personal power. There’s no quadrennial election for CEO of
Facebook. And that’s a normal way that democratic governments ensure
accountability. Do you think that governance structure makes you, in some
cases, less accountable?

Zuckerberg: I certainly think that’s a fair question. My goal here is to
create a governance structure around the content and the community that
reflects more what people in the community want than what short-term-oriented
shareholders might want. And if we do that well, then I think that could
really break ground on governance for an internet community. But if we don’t
do it well, then I think we’ll fail to handle a lot of the issues that are
coming up._

[0]: [https://www.vox.com/2018/4/2/17185052/mark-zuckerberg-
facebo...](https://www.vox.com/2018/4/2/17185052/mark-zuckerberg-facebook-
interview-fake-news-bots-cambridge)

[1]: [https://www.bloomberg.com/view/articles/2018-04-03/it-s-
just...](https://www.bloomberg.com/view/articles/2018-04-03/it-s-just-another-
day-at-the-office-for-spotify)

~~~
heisenbit
These responses are quite revealing. Control is with Zuckerberg who has the
best interest of the community in mind (right, giving liberal access to data
and allow microtargeting to an extent that baffles everyone). It also raises
the serious question whether Zuckerberg truly understands governance.

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pnloyd
Question for anyone who knows the answer. Is there any legal way to force a
majority controlling shareholder to do anything? I've read about Larry Page
and Sergey Brin regularly ignoring shareholder requests to relinquish some of
there powers over Google.

~~~
mullen
Nothing they can do. Facebook stock is separated into "has 10 votes" and "has
1 vote". Mark owns the majority of the "has 10 votes" stock. He can literally
do anything he wants with Facebook and there is nothing anyone else can do
about it.

~~~
ballenf
There are always limits. Every state has minority shareholder rights, even if
the barrier to raising a claim is high.

The other, maybe obvious, area where the majority shareholder's authority is
with regard to illegal acts. This is grayer than it seems in complex
regulatory environments.

The practical approach is to get New York or California state legislatures to
pass strict privacy controls. (I will then get a cheap post office box in that
state and "move" my account under those restrictions on any platform that has
much of my data.)

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tomglynch
That's it for me, I'm off Facebook. This is one area where I see the
importance of decentralisation - giving this much data to one company is
dangerous. I'm part of the crypto-space and having a look there are quite a
few competitors to facebook close to launching (sociall.io, indorse.io,
steemit). Hopefully one of these will take down facebook. Data being owned by
each individual will ensure a catastrophe like this one will never occurs
again.

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debt
I don't disagree. I think Zuck is the face of the Facebook brand, but I don't
think he's the right guy to run a company of this size. He was instrumental in
two great acquisitions: WhatsApp and Instagram.

Other than that, many of his initiatives are nearly complete failures:
Internet.org, Facebook drone internet, Oculus, Portal, Facebook Phone, the
developer program, the cloning of Snapchat, his own national press tour, etc.

Not to mention, he's had numerous serious public-facing, brand-devaluing flubs
that are literally too innumerable to list here.

For some reason, he doesn't surround himself with the best people anymore. I
think because he's surrounded by an army of comms/PR people rather than actual
scientists and engineers at this point.

~~~
adventured
If you're not failing occasionally or perhaps regularly, you're likely not
often attempting anything difficult.

Amazon & Bezos, as one example, has failed at several very prominent efforts
over the years, from competing with eBay in auctions, to competing with Google
in traditional search, to the Amazon phone.

Companies should not succeed at every venture. Not only is it impossible, it's
undesirable for them to succeed like that. By that standard there has never
been a successful company, because nobody has managed to own everything yet.

The measure is overall value creation by the business for shareholders.
Facebook is one of the greatest success stories in world business history by
any reasonable measure of value creation, both in regards to its profit levels
and balance sheet value increases. And they've done that in a shorter amount
of time than any other company before them, with perhaps only Google a close
second.

FB net tangible assets have increased from $41 billion to ~$58 billion in the
last year, that's twice the net tangible assets of Microsoft. Not only does
Facebook have a healthier balance sheet than Microsoft, they're going to catch
them on quarterly profits within about ~18 months. Microsoft is 42 years old,
Facebook is 15 years old. Facebook's net tangible assets match that of
Walmart.

Here's what the balance sheets of other blue chips look like:

Coca Cola: zero net tangible assets

McDonald's: negative $5.6 billion

Oracle: negative $1.5 billion

Netflix: negative $6.7 billion

Starbucks: positive $831k

Comcast: negative $46 billion

Boeing: negative $7.7 billion

GE: negative $40 billion

AT&T: negative $78 billion

Verizon: negative $84 billion

Procter & Gamble: negative $15 billion

IBM: negative $22 billion

Pfizer: negative $33 billion

Johnson & Johnson: negative $25 billion

Lockheed: negative $15 billion

Home Depot: negative $821k

3M: negative $1.8 billion

Delta Airlines: negative $731k

UPS: negative $4.8 billion

PepsiCo: negative $17 billion

Walgreens: negative $590k

~~~
rubyn00bie
Where are you getting this data from? None of it matches anything I'm seeing
or is even close...

Additionally, without knowing what is listed as a tangible asset there is very
little way to compare them to businesses in completely different
markets/industries.

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rakibtg
From my personal thoughts, Zuckerberg acting like a dictator.

It’s shameful seeing how they started to infect the art of creativity.

Everything good comes with ethics, clearly @facebook @WhatsApp @instagram are
not.

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WheelsAtLarge
Zuckerberg controls the voting stock. He's not going anywhere unless he wants
to go. He's one of the few CEO's that has that much control over his company.

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ssaew333
Yeah Mark's getting older, and we all know young people are just smarter. Time
to shake things up. /s

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BrandonMarc
Sharks smell blood in the water.

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camillomiller
Regardless of who’s giving the advice, it’s actually good advice. The guy has
completely lost touch with reality. His comments on Apple and Tim Cook (who
has never attacked Facebook directly, just replied to a specific question)
show that he’s also losing the needed institutional composure his position
requires. Personally I thing his argument (we profile you for advertising
‘cause that’s the only way to give a service to poor people as well) is utter
BS.

~~~
nostromo
It's interesting Zuckerberg called Cook's comments glib... right before
claiming that Facebook is free because it cares about poor people.

Zuckerberg clearly won the glib prize in this exchange.

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feelin_googley
"Muzard warned that Zuckerberg is personally vulnerable if the "crisis of
confidence lingers on. He might find it hard to hold on if shareholders start
getting out. Things can happen very quickly. His equivalent at Uber did not
survive a series of crises, and because _Zuckerberg personifies Facebook there
is no real fall guy to take the bullet for him_."

He is therefore taking a big gamble by agreeing to testify before the US
Congress, even if Facebook has also ramped up its lobbying of politicians.

...

"He must also have the right physical posture and tone of voice. Even with the
best preparation, it will be a physically and emotionally exhausting," he
predicted."

Source:

[https://www.fin24.com/Tech/Companies/facebook-gets-thumbs-
do...](https://www.fin24.com/Tech/Companies/facebook-gets-thumbs-down-for-
handling-of-data-scandal-20180401)

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natecavanaugh
Personally, I think it's unwise to bet against Zuckerberg, and here's why I
think so. He has struggled with the Peter Principle, and IMHO beat it, which I
gotta say is not an easy feat. But he also bet big on things most wouldn't.

FB has gone though crazy struggles before, but if my understanding of both PG
and YC is correct, you bet on the people, not the product. I have a feeling
that if FB Inc has to reinvent itself, it will manage to do so.

