Mark Zuckerberg, founder and chief executive officer of Meta Platforms Inc. (NASDAQ: META), holds a controlling block of stock in the public company. A U.S. Securities and Exchange Commission filing states that he can control the outcome of matters that require shareholder approval and decide who is on the board of directors. After months of horrible performance that has pushed down Meta shares by more than half, Zuckerberg is the only person who can determine who is CEO. For the sake of his shareholders, he should resign and allow someone more qualified, and who shareholders believe can turn Meta around, to take the job.
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Zuckerberg’s lock on the company is complete. From a filing last year:
Our amended and restated certificate of incorporation provides for a dual class common stock structure, which provides Mark Zuckerberg, our founder, Chairman, and CEO, with the ability to control the outcome of matters requiring stockholder approval, even if he owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets.
His actions and their results have proven how unfit he is. Meta’s shares have spiraled down by 70% this year. Of this, 20% occurred the day after Meta’s quarterly financial statements. Revenue for the third quarter fell 4% to $27.7 billion. Net income dropped 52% to $4.4 billion. Expenses rose a breathtaking $22.1 billion. Meta’s Reality Labs, which is charged with building a virtual reality metaverse, lost $9.4 billion in the first three quarters. Zuckerberg said the investment will continue aggressively. Management stated, “We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year.”
Zuckerberg has lost, or pushed out, long-time Chief Operating Officer Sheryl Sandberg. She was blamed for a number of Meta’s missteps. It is hard to make the case this is fair, given that Zuckerberg has final decision-making power over everything.
Founders who control companies have stepped down before, and usually have done so for the benefit of shareholders. It is Zuckerberg’s turn.
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