AP7 calls Facebook abandoning C shares plan an ‘important success for minority owners.’
Swedish state pension fund Sjunde AP-Fonden (AP7) said it has successfully thwarted Facebook CEO Mark Zuckerberg’s attempt to create a new class of shares for the social media company.
Zuckerberg had hoped to create a new C class of Facebook shares to allow him to sell off a significant chunk of his shares to fund his philanthropy efforts, without losing control of the company.Here's a Swedish victory dance:
AP7, along with Amalgamated Bank and other minority shareholders, sued Facebook over the move, claiming it would degrade the value of their holdings in the company. They estimated that their total loss would have been $10 billion if the plans were carried out. But Zuckerberg abandoned the plan just days before he would have been required to appear in court for the lawsuit.
“It is a total victory,” Richard Gröttheim, CEO of AP7, told Swedish financial newspaper Dagens Industri. “It is a total retreat. It is very gratifying, actually.”
Facebook is the third-largest holding in AP7’s Equity Fund with a market value of SEK3 billion ($370 million).
“For us, the decision to overwrite the new share class is a success for several reasons. To begin with, it had directly damaged AP7’s savers financially when the holding had lost value,” said AP7 in a statement. “In the long run, it had also seriously damaged the opportunity to safeguard the savers’ interests because Mark Zuckerberg had been able to retain a majority of the votes by a few percent of the shares. In other words, it is an important success for minority owners to protect their rights.”...MORE
