Facebook Faces High-Level Staff Exodus 346
angry tapir writes "It has been troubled times for Facebook since the social network's IPO in May. There has been speculation that Facebook could suffer a talent drain in the wake of the IPO, and now the organization has lost four of its high-level managers the space of a week: Ethan Beard, director of platform partnerships; Kate Mitic, platform marketing director; Jonathan Matus, mobile platform marketing manager; and Ben Blumenfeld, design manager, have all resigned from the company."
Re:Do we really care? (Score:5, Informative)
No, it compiles toa single 1.5GB C++ binary:
http://en.wikipedia.org/wiki/HipHop_for_PHP [wikipedia.org]
http://en.wikipedia.org/wiki/Facebook#Technical_aspects [wikipedia.org]
Re:When the avalanche has started (Score:5, Informative)
Eventually the shareholders will hold the board's feet to the fire
How will they do that? Zuckerberg outvotes them all, thanks to the dual-class stock structure.
Re:It won't kill FB (Score:5, Informative)
Re:It won't kill FB (Score:5, Informative)
How much are MySpace and Digg worth now?
Digg was bought a month ago for $500,000. To put things in perspective, back in 2008 it was valued at $200 Million.
Of course. Lockup just ended. (Score:5, Informative)
Much employee-owned stock couldn't be sold until the first lockup period ended. Which it just did. [bloomberg.com] So, given Facebook's declining stock price, it's time to cash out. Of course they're quitting. Facebook is profitable, but the stock is overpriced by an order of magnitude or so.
Lockups are far shorter than they used to be. When I cashed out of Autodesk in the 1980s, insiders had a 2-year lockup on restricted stock. And you had to pay taxes when you exercised an option, even though you couldn't sell for another two years. That was before "deregulation", and kept insiders from cashing out before the company tanked. Now it's 90 to 277 days. This encourages hyping the stock, taking the money, and running.
Re:It won't kill FB (Score:5, Informative)
$500K was only for a portion of the company, like the domain name. The patent portfolio was sold in the 8 figure range to someone else. Digg essentially got divvied up 3 different ways, and people only quote the smaller of the transactions... Anyway, it wasn't worth anywhere near 9 figures, but let's be honest: there's been an valuation bubble going on.
Re:It won't kill FB (Score:4, Informative)
No. AOL is around because they own lots of popular media properties that they did not rebrand.
Re:When the avalanche has started (Score:5, Informative)
Can I just say "dear Mark; Class; you make Billy boy Gates look like a choir boy. Make sure you have some good lawyers".
How the hell does he get away with that.
It's an old, and fairly common, way of setting up the voting structure of media companies. By "old", I mean 100+ years. The theory, in the case of the newspaper companies where it started, is that the company needs "editorial freedom". You wouldn't want a newspaper to be told what news to print by its biggest shareholders, so a stock voting structure that leaves control of the paper in the hands of some people who are considered to be trustworthy is a good idea.
In the context of tech companies, Google pioneered the use of the dual-class structure, as far as I know. It's possible Google wasn't really the first, but they were the first to make a big splash doing it. Part of Google's argument was that it was important that search results also have editorial freedom, that Google not be in a position to be forced by big shareholders to remove or bury search results that they don't like, or promote results they do like. Even more, Google argued that being beholden to shareholders was bad for fast-moving companies, because it forced them to focus on short-term profitability to the exclusion of all else. Google's founders wanted the freedom to ignore short-term profitability where they thought it was more important to focus on the long term, or even to focus on other issues entirely. So, for those reasons Larry Page, Sergey Brin and Eric Schmidt have a controlling interest in Google, able to collectively outvote the rest of the shareholders combined.
In fact, they recently recognized that employee stock grants and some future desire to raise more capital by offering more stock on the public markets might at some point dilute their ownership, so they have announced a plan to do a two-for-one split, essentially, with all of the newly-created shares being non-voting. This third class of stock, which has no votes at all, will be used rather than the common one-vote-per-share stock for employee bonuses and possibly for additional public offerings. There are also some provisions in the agreement that require the founders to sell their 10-vote shares rather than others if they want to sell any stock (though the shares convert to one-vote shares when sold), in order to motivate them to retain their ownership stake if they want to retain their control. I don't know if the SEC has signed off on the plan or not, yet, but it's unlikely to be denied. Of course, the change had to pass a shareholder vote, but Larry, Sergey and Eric outvote the rest of the shareholders combined, so that was no problem.
After Google did it, many other web-focused technology companies have adopted dual-class voting structures in their IPOs, and Facebook followed suit.
So, no lawyers will be necessary. Or not for very long, anyway. The legality of this structure has been firmly established for many decades. The bottom line is that shareholders knew all of this when they decided to buy in, so the shareholders have already signed off on the structure.