A Facebook Inc (FB.O) shareholder filed a proposed class action lawsuit on Friday in a bid to stop the company’s plan to issue new Class C stock, calling the move an unfair deal to entrench Chief Executive Mark Zuckerberg as controlling shareholder.
The lawsuit, filed in the Delaware Court of Chancery, followed the social networking company’s announcement on Wednesday of its plan to issue the shares.
The rejiggering of Facebook’s share structure is effectively a 3-for-1 stock split. Zuckerberg’s said in December that he intends to put 99 percent of his Facebook shares into a new philanthropy project focusing on human potential and equality.
Facebook plans to create a new class of shares that are publicly listed but do not have voting rights. Facebook will issue two of the so-called « Class C » shares for each outstanding Class A and Class B share held by shareholders. Those new Class C shares will be publicly traded under a new symbol.