ELI5: Why did Mark Zuckerberg think he would get away with diluting Eduardo Saverin's stake in Facebook down from 34% to .03% in The Social Network? : r/explainlikeimfive
Explain Like I'm Five is the best forum and archive on the internet for layperson-friendly explanations. Don't Panic! Just seems like obvious stealing and that Eduardo would be an easy winner in court. found this It was a bit more complicated than Facebook printing new shares, but there wasn't any "clause" they invoked to dilute Eduardo. Some key points of what happened, mostly based off those IM (instant message) convos that were leaked last year: Mark Zuckerberg wanted to cut out Eduardo, since he was failing at his job. What he did was he created a new entity in Delaware to acquire the existing company in Florida (he had to do this anyway -- Delaware is far more corporate friendly). In the old company, Eduardo owned about 30%. In the new one, he owned 24%. Then Eduardo signed an agreement for his 3 million shares but had to give up intellectual property rights. This was big. Then Facebook pulled the rug from under him. Zuckerberg issued 9 million more shares, none of which went to
Explore this link on the map →