Facebook is one of the most transformative social media platforms. When it first appeared on the internet, it provided web users with a new way to stay in touch with friends and reconnect with old ones. Read through this article to answer the question, Is Facebook a Private Company?
Is Facebook a Private Company?
No, Facebook is not a private company anymore. Facebook went public in 2012 with an IPO priced at $38 per share. An IPO occurs when a private company sells shares of its stock to the public on the stock exchange.
It gave ordinary investors the opportunity to own a piece of Facebook. In most cases, this gives shareholders a vote in the company on certain issues. They have some say in how the company proceeds.
This is to protect their investments and earn money from dividends when the company makes a profit. Although Facebook is a public company, it operates as a private company. There’s a good reason for this.
Find Out Why Facebook is Still A Private Company
How Does Zuckerberg Keep His Stock’s Power When Early Investors Sell?
What happens when an early investor sells their stock is one issue you may notice in a structured stock system? When Facebook announced its intention to go public, inevitably, some of the early investors would sell.
One would think that the average public investor who purchased those shares would be granted 10 points of the voting power. That is not correct.
When an investor sells their stock, it reverts from stock B to stock A, according to a clause written by Zuckerberg. This means that an investor who purchases stock B from an early investor is actually purchasing stock A.
Can Mark Zuckerberg Choose His Own Successor?
nother significant distinction between most public companies and Facebook is the selection of a successor. In most cases, a publicly-traded company votes on who will be the next CEO.
The board will deliberate on various nominees before voting. This gives general shareholders the opportunity to help steer the company in the best possible direction.
However, Facebook’s shareholders will notice that they do not have this power. Another provision that Zuckerberg included was the ability to select his own successor.
Check Out Why Facebook is Mostly a Private Matter
Facebook was previously a private company, but it went public in 2012. However, because of the way the company structures its stocks, many people regard Facebook as a limited private company
Although the company has many shareholders, Mark Zuckerberg retains primary ownership and control.
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