Risks To Facebook: IPO Filing Lists Mark Zuckerberg, Google+, The Government As Risks
By Jason Gilbert
As part of its much ballyhooed S-1 filing on its road to going public, Facebook ($FB) also listed a set of "Risks Related to Our Business and Industry." These risks are laid out as a sort of warning for investors, a litany of things that could go wrong for Facebook and bring it crashing back down from its sky-high valuation that could reach as high as $100 billion when the company begins officially trading publicly.
Some of the risks listed should be no surprise -- members becoming uninterested over time, rival startups stealing users away -- while others are a bit more unexpected. (Example: One of the risks facing Mark Zuckerberg's company: Mark Zuckerberg).
Below, read why Zuckerberg could bring about the downfall of the company he created at age 19 in 2004, and check out the other major risks facing Facebook, including China, the U.S. government, and -- gasp! -- we the media! In all, the Facebook S-1 filing listed 38 major risk factors facing its "industry and business"; we've picked out the nine that caught our eye.
Hungry for more Facebook facts, check out the most interesting new stats Facebook revealed in its S-1. Read on to see how you helped Facebook get to where it is today.
Jason Gilbert
Facebook Technology Mark Zuckerberg Facebook China Facebook S1
Perhaps the most eye-popping risk listed in the S-1 is the idea that Mark Zuckerberg's bad decision-making could lead to a decline in company value. Along with "users fleeing" and "decline in advertising revenue," the following was listed as a major risk factor: <strong> <em>Our CEO has control over key decision making as a result of his control of a majority of our voting stock. </em></strong> Zuckerberg owns 58 percent of Facebook stock, which means that he "has the ability to control the outcome of matters" that come before stockholders. Furthermore: As a stockholder, even a controlling stockholder, Mr. Zuckerberg is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements, in his own interests, which may not always be in the interests of our stockholders generally. Should stockholders fear the man who controls the company they hold stock in?