Zuckerberg — Charitable Gains

When we first found out that Mark Zuckerberg, Facebook ($FB) founder and CEO, was going to give away 99% of his Facebook shares, it took many investors aback. Today, after Facebook crushed the earnings estimates yet again, we found out that Zuckerberg would soon be in complete control of Facebook after giving every Class A and B shareholders two non-voting Class C shares. While I’ve never been a fan of C shares, I might have to make an exception for FB. Let me explain:

Mark put out a nice letter along with the earnings release that explained why he wants to give away his shares:

“…there are more global challenges that I feel a responsibility to help solve — like helping to cure all diseases by the end of this century, upgrading our education system so it’s personalized for each student, and protecting our environment from climate change. That’s why Priscilla and I created the Chan Zuckerberg Initiative and committed to give 99 percent of our Facebook shares during our lives to advance human potential and promote equality.”

“ Today, Facebook’s board of directors is announcing a proposal to create a new class of stock that will allow us to achieve both goals.

Wow, Zuck, those are some really lofty goals. You’re going to have to donate a hell of a lot of money in order to make an impact. Curing all diseases alone doesn’t come cheap. As we know, the goal of a corporation is to increase shareholder wealth. These shares are going to be transferred to the Initiative (trust), and they will appreciate just as our Class C shares will appreciate. Mark and the Facebook team are clearly dedicated to running a tight ship and doing what’s right for their customers and shareholders. By doing what’s right for shareholders, Zuckerberg isn’t just doing what’s right for his business owners, but is doing what he feels is right to raise as much money for charity as a market valuation will allow. Zuckerberg wants to give away as much money as possible, and is betting that he will get the best return in the world with Facebook’s stock.

Just think about it. That’s a stock I want to own.

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