Facebook introduces dual-class share structure


25 Nov 2009

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Privately owned social-networking site Facebook is reported to have created a dual-class share structure which provides founder Mark Zuckerberg and other shareholders with greater control over the company.

According to Jessica Vascellara of the Wall Street Journal, the company is converting all current stock to Class B shares, which have 10 times the voting power of Class A stock. All the stock owned by current shareholders will remain as Class B stock unless sold during an initial public offering (IPO), in which case they will revert to Class A shares.

While the company said it has no plans to go public at the moment, changing the structure is widely seen as a sign it is considering an IPO.

A number of privately owned companies have introduced a dual-class share structure before going public, including Google.

Article courtesy of businessandleadership.com