Mark Zuckerberg Signed the Wrong Document • Hacker News Board

Re: Mark Zuckerberg Signed the Wrong Document

#71

Post by smelendez » Fri, Oct 30, 2015, 9:57 AM UTC

hacknat wrote: post #21

It may seem like splitting hairs, but the Chancery court's decision makes sense. Corporate governance sounds boring and technical, but it is an important sounding board for valuation and consent. Imagine a company where two people collectively owned 51% of a public company, one of them more "in charge" than the other. If they start making all kinds of ad hoc decisions without shareholder consent, then they will never…

Right--and the court doesn't want to be in the business of figuring out when to grant exceptions.

Re: Mark Zuckerberg Signed the Wrong Document

#72

Post by downandout » Fri, Oct 30, 2015, 10:04 AM UTC

MrJagil wrote: post #67

downandout wrote: post #57

The "investors" suing are just working with/for attorneys that extort massive legal fees and damages from public companies for a living. This case has nothing to do with the underlying conduct, which was merely a clerical error. These attorneys are one of the big reasons that unicorns are staying private. The most famous of these bottom-feeding attorneys, Bill Lerach, built an estimated net worth of $700 million [1]…

It's interesting, reading your comment I was of the impression that Lerach must be universally disliked for his slimy methods, exploitation of the system and oppressiveness in the free market (unicorns scared to go public). Reading the first comment on the linked youtube video(i know) reminded me once again to be sceptical of everything i read though: "Bill Lerach, the former #1 enemy of corrupted corporations. He ma…

To be sure, his work was a mixed bag. His firm ran the shareholder case against Enron, which clearly was not baseless litigation (his personal share of the legal fees awarded in that case alone was rumored to be $80 million). However, having read a few things about him, the majority of the cases he brought were designed to extort quick settlements out of the companies. He was/is reviled by corporate America, and he probably appeals to the anti-corporate crowd that likes to see large corporations suffer simply because they are successful. That is why you see varying opinions.

Re: Mark Zuckerberg Signed the Wrong Document

#73

Post by [deleted] » Fri, Oct 30, 2015, 11:46 AM UTC

downandout wrote: post #57

The "investors" suing are just working with/for attorneys that extort massive legal fees and damages from public companies for a living. This case has nothing to do with the underlying conduct, which was merely a clerical error. These attorneys are one of the big reasons that unicorns are staying private. The most famous of these bottom-feeding attorneys, Bill Lerach, built an estimated net worth of $700 million [1]…

[deleted]

Re: Mark Zuckerberg Signed the Wrong Document

#74

Post by apricot » Fri, Oct 30, 2015, 11:55 AM UTC

downandout wrote: post #57

The "investors" suing are just working with/for attorneys that extort massive legal fees and damages from public companies for a living. This case has nothing to do with the underlying conduct, which was merely a clerical error. These attorneys are one of the big reasons that unicorns are staying private. The most famous of these bottom-feeding attorneys, Bill Lerach, built an estimated net worth of $700 million [1]…

Could there be second-level bottom-feeding attorneys whose business is suing bottom-feeding attorneys for abusing the law for their own monetary gain?

Re: Mark Zuckerberg Signed the Wrong Document

#75

Post by JDDunn9 » Fri, Oct 30, 2015, 11:56 AM UTC

sportanova wrote: post #27

jmcatani wrote: post #19

Earlier quoted context omitted.

I really like your point on the Unicorns "having their cake and eating it too" in regards to public funding. I am very worried that the technology industry is creating this new capital market that reserves access for the super rich and is completely free from goverment oversight. Are there any points in history that had similar market structure? And if so, how did those markets respond to successes and failures?

It's turned that way because of onerous regulations (Sarbanes-Oxley). We made it way too painful to go public, and now we can't benefit from most of the tech growth

The average cost of compliance with Sarbanes-Oxley was 0.043% of revenue by a 2006 survey.

Re: Mark Zuckerberg Signed the Wrong Document

#76

Post by arethuza » Fri, Oct 30, 2015, 12:00 PM UTC

downandout wrote: post #72

MrJagil wrote: post #67

Earlier quoted context omitted.

It's interesting, reading your comment I was of the impression that Lerach must be universally disliked for his slimy methods, exploitation of the system and oppressiveness in the free market (unicorns scared to go public). Reading the first comment on the linked youtube video(i know) reminded me once again to be sceptical of everything i read though: "Bill Lerach, the former #1 enemy of corrupted corporations. He ma…

To be sure, his work was a mixed bag. His firm ran the shareholder case against Enron, which clearly was not baseless litigation (his personal share of the legal fees awarded in that case alone was rumored to be $80 million). However, having read a few things about him, the majority of the cases he brought were designed to extort quick settlements out of the companies. He was/is reviled by corporate America, and he p…

He might also appeal to people who are generally pro-corporate but also like to see anyone (individual or corporation) brought to justice if they misbehave?

Can you really "extort" money through the court system in the US?

Re: Mark Zuckerberg Signed the Wrong Document

#77

Post by forgetsusername » Fri, Oct 30, 2015, 12:02 PM UTC

Animats wrote: post #63

nostrademons wrote: post #56

Earlier quoted context omitted.

Dual-class voting structures have been around forever. Ford and Berkshire Hathaway are two prominent examples. Historically, they've been relatively rare, and the non-voting shares don't trade at much of a discount. It's rare that individual shareholders get to exercise their voting rights anyway. The interesting trend now is that so many tech companies have dual-class supervoting shares. It sends the message that a…

The New York Stock Exchange, back when it had a Board of Governors, did not allow companies with more than one class of stock to trade on the NYSE.[1] That rule was in effect from 1928 to 1988. The NYSE gave it up because companies were listing on the NASDAQ instead, which allowed multiple classes of stock. Ford was grandfathered in. Berkshire Hathaway only created a second class of stock in 1996, and that was just b…

>and they're going to lead to trouble for companies whose stock drops and whose management can't be replaced.

That will be both the problem and solution. Eventually a situation will arise in which the shareholders get burned, and it will be restricted from that point on, either by fiat or refusal of common investors to partake in any offering with this sort of structure.

Re: Mark Zuckerberg Signed the Wrong Document

#78

Post by firebones » Fri, Oct 30, 2015, 12:08 PM UTC

apricot wrote: post #74

downandout wrote: post #57

The "investors" suing are just working with/for attorneys that extort massive legal fees and damages from public companies for a living. This case has nothing to do with the underlying conduct, which was merely a clerical error. These attorneys are one of the big reasons that unicorns are staying private. The most famous of these bottom-feeding attorneys, Bill Lerach, built an estimated net worth of $700 million [1]…

Could there be second-level bottom-feeding attorneys whose business is suing bottom-feeding attorneys for abusing the law for their own monetary gain?

"You're very clever, young man, very clever," said the old lady. "But it's bottom-feeding attorneys all the way down!" [1]

[1] https://en.wikipedia.org/wiki/Turtles_all_the_way_down

Re: Mark Zuckerberg Signed the Wrong Document

#79

Post by MichaelBurge » Fri, Oct 30, 2015, 12:10 PM UTC

sopooneo wrote: post #28

If a share barely gives you voting rights, and the company does not, and does in the foreseeable future plan to, issue dividends, then what is the inherent value of the stock? Is it just my portion of the proceeds in case of a firesale?

I'm not sure about the inherent value, but here's an argument that shows that it can't be valueless:

If any company's stock is trading too low, you could take a loan and buy out the company using its own profit to pay the loan. So you would expect the stock price to track profits, even if existing shareholders are only in it waiting for a buyout.

That idea ensures the stock is valued somewhat accurately(say, within 35% of the 'true' value on the private market), but I wouldn't think it ensures that the market prices are tight down to the cent.

Re: Mark Zuckerberg Signed the Wrong Document

#80

Post by wolf550e » Fri, Oct 30, 2015, 12:11 PM UTC

arethuza wrote: post #76

downandout wrote: post #72

Earlier quoted context omitted.

To be sure, his work was a mixed bag. His firm ran the shareholder case against Enron, which clearly was not baseless litigation (his personal share of the legal fees awarded in that case alone was rumored to be $80 million). However, having read a few things about him, the majority of the cases he brought were designed to extort quick settlements out of the companies. He was/is reviled by corporate America, and he p…

He might also appeal to people who are generally pro-corporate but also like to see anyone (individual or corporation) brought to justice if they misbehave? Can you really "extort" money through the court system in the US?

Patent trolling is extortion, isn't it?