Stories

SaveSave story

Facebook folds on stock reclassification

Illustration: Greg Ruben / Axios; Photo: Noah Berger / AP

Facebook on Friday said in a regulatory filing that it will no longer issue a new class of non-voting stock that had become the focus of a lawsuit that would have required Mark Zuckerberg to testify next Tuesday in a Delaware courtroom.

At issue: The new stock would have allowed Zuckerberg to maintain his majority voting rights at Facebook, despite selling existing shares to fund his philanthropic efforts. But the plan sparked a class action lawsuit, and was on hold pending an outcome.

Why it matters: Tuesday would have been only the second time that Zuckerberg testified in open court. And it would have come at a particularly fraught time, as he handles allegations that the Facebook platform was used by Russian operatives during the election.

Bottom line: Facebook blinked.