
Time has come for Zynga to sell the farmville - e15ctr0n
http://blogs.reuters.com/breakingviews/2016/03/03/cox-time-has-come-for-zynga-to-sell-the-farmville/
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chollida1
> Pincus owns a few of the A shares, which confer one vote to their third-
> class owners. He also owns 63 percent of the B shares, which come with seven
> votes apiece; and 100 percent of the C shares, each of which gets 70 votes.
> All told, for a 10 percent economic interest in Zynga, Pincus wields 64.4
> percent of the ballot.

There are more than a few analysts, I'm intentionally using some weasel
wording here as they've asked that I not make their names public, who think
that Zynga could be the firm that brings dual class share structures to court.

The thing that could make Zynga interesting is that normally when a minority
share holder gets screwed, or thinks that they are getting screwed, they are
an individual who doesn't have alot of options.

In this case there are alot of hedge funds, the stock has become a hedge fund
hotel, who bought into Zynga because their cash on hand and building
liquidation makes them a prime take over target and hence a must own stock for
funds doing pre-arb.

It's not going to take a very large mis-step or perceived mis-step by the CEO
and board for these funds to get litigious.

I am in no way a legal expert so I'll make it clear that this is hearsay, but
I've been told that if they get to court then this could be a case that helps
shape the role of dual class share structure in public companies.

I guess most people won't be familiar with the term Hedge fund hotel....
[http://www.zerohedge.com/news/presenting-latest-hedge-
fund-h...](http://www.zerohedge.com/news/presenting-latest-hedge-fund-hotel-
these-are-most-beloved-stocks-hedge-funds-september-30)

~~~
cenal
As a founder I hope that should this go to court that Pincus prevails. These
funds invested knowing about the risks and the rules. They should be forced to
honor that agreement. Even if Pincus isn't doing a great job he's not
unethical for raising money on his terms. All founders should hope to be in
his position when they go to raise.

~~~
rahimnathwani
"All founders should hope to be in his position when they go to raise."

Yes, and all shareholders should hope that such founders use there voting
power to maximise long term shareholder value. I guess that the parent comment
is suggesting this isn't always the case.

