Facebook Stock Split Won’t Be So Easy — Just Ask Google

The social network’s most recent earnings report sent shares surging to record highs and had analysts gushing plaudits like “insurmountable competitive advantage” and “perfect.” However, it also included Facebook’s plans for a three-for-one stock split and a new class of nonvoting stock in the name of “Preserving Founder-led Structure.” That founder would be Zuckerberg, and the deal would cement the CEO’s control of the company for the foreseeable future—no matter how diluted his holdings in Facebook may become—as he gradually sells off his shares to fund philanthropy efforts of the Chan Zuckerberg Initiative. While investors may be fine with that now, there is no guarantee of what the future may hold.“He is doing good work, and that’s great, but it’s not clear to us why he should maintain control, even as the ownership goes down,” said Ken Bertsch, executive director of the Council of Institutional Investors in Washington, D.C. In March, CII, a nonprofit association of pension funds, embraced a policy of “one share, one vote” that it recommends to its member investors.

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