Could Facebook fire Zuckerberg?
August 19, 2012 8:24PM
Facebook CEO Mark Zuckerberg | AP file photo
Updated: September 21, 2012 6:37AM
SAN FRANCISCO — As Facebook’s stock price sinks and criticism mounts, an emerging parlor game in Silicon Valley is speculation on the job status of Facebook CEO Mark Zuckerberg. Shares of the social-networking company dipped 4 percent Friday to $19, half the May 18 IPO value, before closing at $19.05.
So far, there are no signs of open revolt among major Facebook shareholders beyond a few class-action lawsuits over its botched initial public offering. But some openly wonder if it might be time for Zuckerberg to step aside as CEO.
“He is unquestionably a genius at starting a company, but that does not necessarily translate into running a public company,” says securities attorney Andrew Stoltmann. If Facebook’s problems persist, its board of directors may consider a change at the top, he says.
Facebook isn’t the first company to struggle in the transition from start-up to public company. Others, such as Apple and Yahoo, eventually pushed aside founders in favor of adult supervision before bringing their founders back.
But for many, the notion of Zuckerberg being forced out is patently absurd. As Facebook’s largest shareholder, with 20.7 percent, and its resident visionary, Zuckerberg has the loudest say in his future at the company.
“He is safe because Facebook would not be Facebook without him,” says Duncan Davidson, managing director of Bullpen Capital.
Mistakes were made by “grown-ups,” Davidson says, like the bankers for Facebook who should have known better when the underlying projections changed at the last minute, and Nasdaq officials, who should have held the deal a week when they encountered a catastrophic software error. “The core problem is that Facebook should have gone public in 2009 when the public investor would have caught the knee of the curve of value creation,” he says.
In Chief Operating Officer Sheryl Sandberg and CFO David Ebersman, Facebook already has adult supervision, contends Wedbush Securities analyst Michael Pachter. “The only thing that Facebook has done that is wrong is they issued way too many shares and they unlocked way too many shares and flooded the market,” Pachter says. “I think they’re running the company fine.”
Gannett News Service