When Mark Zuckerberg took Facebook, Inc. public in 2012, investors were offered shares of Facebook Class A stock, which had one vote per share. Facebook reserved its Class B stock, which had 10 votes per share, for its founders and other favored insiders. After completing the public stock offering, Zuckerberg owned less than a quarter of the company’s equity, but was entitled to 58.5 percent of its voting control through his ownership of Class B shares.
Public investors in Facebook understood that Zuckerberg controlled the company and willingly invested in Zuckerberg’s vision. They also understood, however, that if Zuckerberg sold approximately 13.5 percent of his shares, he would no longer have absolute voting control over the company.
