And just like that, there will be no new ownership structure for Facebook.
Several financial news outlets, including CNBC, released news that a new class of stock will not be issued that would have let CEO Mark Zuckerberg maintain voting control of the company. That proposed ownership, according to reports, would have changed in the wake of Zuckerberg’s sale of millions of shares in the recent past to help fund his philanthropic efforts.
Known as reclassified C shares, the new stock issuance had some investors up in arms, enough to file a class action lawsuit in 2016. The suit sought to stymie that issuance, arguing that the Facebook stock, with no attendant voting rights, would have diluted other holders.
According to a spokesperson email to CNBC, the company’s decision to abandon the plan came as the company’s board “determined that withdrawing the reclassification was in the best interests of Facebook and its shareholders.”
In his own commentary delivered via Facebook, Zuckerberg said that “over the past year and a half, Facebook’s business has performed well, and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more. As a result, I’ve asked our board to withdraw the proposal to reclassify our stock – and the board has agreed.”
Zuckerberg said his charitable giving would continue, as another 35 to 75 million personally held shares would be sold through the next 18 months.
News surrounding the company also touched on political ads, with headlines focused on ads purchased by Russian firms throughout last year’s presidential election campaign. Reuters reported that the company has agreed to hand over the roughly 3,000 paid ads (to the tune of about $100,000) that were bought by Russians, to be given over to congressional regulators.
The company has also set in motion a revamping of how it will work with and account for political social media advertising moving forward.
Zuckerberg said that the company would enact universal availability of online ads, which will be visible to anyone at any time. In addition, the advertisers will have to disclose who is paying for those ads, which is standard practice mandated by law for television stations. Zuckerberg said in an announcement that “we will work with others to create a new standard for transparency in online political ads.”