The Facebook lawyer full-employment act continues to expand
The ConnectU cofounders are arguing that Facebook executives and lawyers presented the cash-and-stock offer’s value as $65 million, relying on a valuation of $15 billion that Microsoft paid in 2007 when buying preferred shares in the company. The settlement, however, was to be paid in common shares, not preferred shares, which Facebook itself valued at roughly 75 percent less for the purposes of calculating taxes on stock-based compensation — cutting the settlement’s offer roughly in half.
The real question here is why Facebook’s lawyers haven’t succeeded in making this lawsuit go away. Before, ConnectU’s founders were just after a piece of the Facebook pie. Now, the stakes keep getting higher as the case drags on. An actual indictment on securities fraud would make it impossible for Zuckerberg to remain Facebook’s CEO if it were to go public. However unlikely that is, why take the risk?