- Update: Facebook announced on Friday it is abandoning plans to reclassify its shares, stating "withdrawing the reclassification was in the best interests of Facebook and its shareholders."
- It was initially reported Facebook settled a class-action lawsuit with shareholders who were seeing to block the company from issuing reclassified C shares.
- The investors argued allowing the shares to be sold could lessen the value of their shares. However, Zuckerberg would still be able to retain voting control of the company despite not having a large stake.
The class action shareholder lawsuit was intended to block Facebook from issuing reclassified C shares, which some investors argued could cause shares to lose billions of dollars of value when they were traded. The new C shares would be publicly listed but come with no voting rights.
The classification would have allowed Facebook CEO Mark Zuckerberg to keep voting control of the company, even if he decided to lower his total ownership stake. The lawsuit said the new structure would have meant that Zuckerberg could own as little as 2 percent of the company and still keep voting control.
In a note on Facebook in April 2016, Zuckerberg wrote the plan was created in order to allow him and his wife Priscilla Chan to donate money to solving global issues like curing diseases, improving education and climate change. It would also still allow him to stay "committed" to improving and leading Facebook, including helping the company grow internet access around the world, improve its artificial intelligence and develop virtual and augmented reality.
The trial was scheduled to begin September 22, and Zuckerberg was scheduled to take the stand.
Other people who were expected to testify include Facebook board members Marc Andreessen, CEO of the Bill & Melinda Gates Foundation Susan Desmond-Hellmann, and former White House chief of staff Erskine Bowles.