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View Full Version : ZDNET: Why Facebook co-founder Eduardo Saverin is a schmuck



vapacersfan
05-15-2012, 08:23 AM
http://www.zdnet.com/blog/government/why-facebook-co-founder-eduardo-saverin-is-a-schmuck/11263



Summary: In order to avoid paying taxes on his multi-billion dollar IPO windfall, Eduardo Saverin, co-founder of Facebook, is renouncing his United States citizenship.


I am torn on this. 600 million in a hell of a lot to pay in taxes, but I also learned that his family escaped to the US when he was young to get away from kidnappers because his family was wealthy.

I also think this opens up the door for the discussion on how screwed up our tax structure is (is this any diffrent from businesses who do this all the time to save a buck?) but that is a topic for another day

Steagles
05-15-2012, 03:15 PM
Wow, what a prick!

travmil
05-15-2012, 05:47 PM
Rich people have been doing this for decades in the US. The only reason you're hearing anything about this is that the amount of money we're talking about here is so large. It might be the first time anyone has ever avoided BILLIONS in taxes by doing this.

vapacersfan
05-15-2012, 05:52 PM
Rich people have been doing this for decades in the US. The only reason you're hearing anything about this is that the amount of money we're talking about here is so large. It might be the first time anyone has ever avoided BILLIONS in taxes by doing this.

600 million (he will get 4 billion from the IPO)

Pingu
05-16-2012, 12:39 AM
It's a lot of taxes but it's also a heck of a lot of income.

Bball
05-16-2012, 03:11 AM
ZDNET: Why Facebook co-founder Eduardo Saverin is a schmuck

I thought this was going to say Eduardo Saverin is the one that invented and/or is pushing "Timeline"....

travmil
05-16-2012, 08:41 AM
600 million (he will get 4 billion from the IPO)

It will be billions in the end. That kind of money doesn't just stop growing. He's also avoiding all future taxes on the gains that money would earn.

vapacersfan
05-16-2012, 08:47 AM
I did read today he will have to pay an "exit" tax

SycamoreKen
05-16-2012, 11:30 PM
Wow he didn't want to pay 15%? What a tough life.

SycamoreKen
05-16-2012, 11:31 PM
I thought this was going to say Eduardo Saverin is the one that invented and/or is pushing "Timeline"....

I find the timeline thing kind neat. I have a group set up to monitor my friends stuff plus the news feed, so it is just one page on my site.

travmil
05-17-2012, 08:27 AM
If you don't like Facebook's timeline, all you have to do is...start your own social network, design it the way you want, then persuade every single person with an internet connection and a device to view it to sign up for it. Simple.

SycamoreKen
05-17-2012, 09:53 AM
I would more inclined to drop Facebook because the guy is getting out of paying his fair share than the timeline thing.

Bball
05-17-2012, 11:15 AM
If you don't like Facebook's timeline, all you have to do is...start your own social network, design it the way you want, then persuade every single person with an internet connection and a device to view it to sign up for it. Simple.

And back in the day if I didn't like New Coke all I had to do was figure out the recipe for Classic Coke and make my own....

ilive4sports
05-17-2012, 03:02 PM
If you don't like Facebook's timeline, all you have to do is...start your own social network, design it the way you want, then persuade every single person with an internet connection and a device to view it to sign up for it. Simple.
or use Twitter.

Twitter >>>> Facebook

vapacersfan
05-17-2012, 05:21 PM
Havent been on any social media in over 6 months.

There are times I miss it, but for the most part I am able to survive with email, phone calls, and even the old fashioned letters via the U S Postal Service

joew8302
05-18-2012, 09:07 AM
Why are more people not blaming the government? Not to turn this political, but if you had 600 million wouldn't you try your best to protect it?

hoosierguy
05-18-2012, 07:34 PM
Why are more people not blaming the government? Not to turn this political, but if you had 600 million wouldn't you try your best to protect it?

He will have more money than he could ever need either way. Meanwhile the government is bleeding red due in large part to lower tax receipts as a result of the poor economy.

Asking Saverin to pay a measly 15% capital gains tax on billions in income is not the problem. Wages are taxed at higher rates than passive investment income. That is the problem.

Sparhawk
05-19-2012, 10:29 AM
Bought some stock. I figured the price might go down, so I didn't buy much. I'll probably pick up a few more if the price continues to fall. I think long term this stock could perform well.

Unlike some peeps though, I don't put all my eggs in one basket. I'm not buying 100's of stocks. heh Just enough that if it continues to go down, I won't lose much, but if it climbs consistently, maybe I'll have a nice profit in a year.

What did LinkedIn's IPO start at? It's still around $100/share.

graphic-er
05-19-2012, 10:40 AM
He will have more money than he could ever need either way. Meanwhile the government is bleeding red due in large part to lower tax receipts as a result of the poor economy.

Asking Saverin to pay a measly 15% capital gains tax on billions in income is not the problem. Wages are taxed at higher rates than passive investment income. That is the problem.

Just to piggy tail off you comment a bit with out it getting too political....

A certain party would prefer a 0% capital gains tax......sounds terrific right? Until you realize that the GPD is comprised of about 60% financial services sector. The rich get richer, and the poor pay more taxes and ultimately receive less value for their government services.

graphic-er
05-19-2012, 10:45 AM
Bought some stock. I figured the price might go down, so I didn't buy much. I'll probably pick up a few more if the price continues to fall. I think long term this stock could perform well.

Unlike some peeps though, I don't put all my eggs in one basket. I'm not buying 100's of stocks. heh Just enough that if it continues to go down, I won't lose much, but if it climbs consistently, maybe I'll have a nice profit in a year.

What did LinkedIn's IPO start at? It's still around $100/share.

I am interested in picking up some of the stock as well, but no way was I gonna buy on the opening day. This baby is gonna plummet for a bit longer while all the employees make themselves millionaires. Honestly this is a company that you have to wonder about long term because in a few weeks all the talent that was there over the years making it so valuable will probably not be there next week. Many of their employees are set for life now.

It might be a good gamble, if linked-in is worth $100 a share then there is no reason why Facebook can't reach that mark over the next year or so.

I kinda view facebook as the last major internet IPO though. If you didn't get aboard Apple back when it was under $100 a share, and you didn't board the Google train, I certainly didn't because back then I was still in college and had no money to invest. Then Facebook might be your last chance for a long time to hop aboard a company that has the potential to grow based off mass popularity alone.

Though I heard Twitter will eventually make an IPO and that one will probably be a sweet deal, if they can actually figure out some revenue model.

Sparhawk
05-20-2012, 03:40 PM
I work in online marketing. Came from 360i before heading to the corporate side at IHG.

I will say that businesses are starting to spend more media dollars on Facebook. Even if it's just to drive more "likes" on their pages to build awareness. I think advertising spend on Facebook will continue to grow at least over the next year or two. Trying to drive ROI is proving futile at this point, so unless Facebook can get creative (allowing businesses to create point of purchase straight on Facebook) or consumers start to be willing to leave Facebook in order to make a purchase, then Facebook could start to lose money.

That's the way I see it, and why I am hopeful the stock price will rise over the course of a year. I view this as a long term investment. Again, on the chance it doesn't, then I didn't blow all my savings on a hope.

vapacersfan
05-21-2012, 08:00 AM
EXCLUSIVE: Here's The Email Zuckerberg Sent To Cut His Cofounder Out Of Facebook
http://articles.businessinsider.com/images/pixel.gif
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<IFRAME height=153 src="http://www.youtube.com/embed/mOMUe26X3mo" frameBorder=0 width=300 itxtBad="1"></IFRAME>
Billionaire Facebook (http://www.businessinsider.com/blackboard/facebook) cofounder Eduardo Saverin (http://www.businessinsider.com/blackboard/eduardo-saverin) – the guy everyone now hates because he's renouncing his US citizenship in order to avoid a lot of taxes (http://www.businessinsider.com/goodbye-america-billionaire-facebook-cofounder-renounces-citizenship-2012-5) – hasn't worked at Facebook since 2005. That's when CEO (http://articles.businessinsider.com/2012-05-15/tech/31706649_1_mark-zuckerberg-billionaire-facebook-eduardo-saverin#) Mark Zuckerberg (http://www.businessinsider.com/blackboard/mark-zuckerberg) diluted his stake and then booted him from the company.

Saverin's exit from Facebook was the central plot of The Social Network (http://www.businessinsider.com/blackboard/the-social-network).

Maybe you remember this scene?

Today we have a long, detailed re-telling of the true story behind the movie. (http://www.businessinsider.com/how-mark-zuckerberg-booted-his-co-founder-out-of-the-company-2012-5)

The basics: Saverin was tasked with running Facebook's business side while Zuckerberg worked on the product. But instead of joining the company out in Palo
Alto, Saverin stayed on the East coast and worked on another startup. Eventually, he started to feel left out, and he froze Facebook's bank account (http://articles.businessinsider.com/2012-05-15/tech/31706649_1_mark-zuckerberg-billionaire-facebook-eduardo-saverin#).

To ease Saverin out and limit his say over how Facebook would be funded, Zuckerberg reduced Saverin's stake in the company.

Zuckerberg did this by creating a new company to acquire the old company and then distribute new shares in the new company to everybody but Saverin.

Well now, thanks to a well-placed source, we've come up with something cool.
It's the email then 20-year-old Mark Zuckerberg sent his lawyer giving him the go ahead to draft paperwork that would result in Saverin's dilution.

We love the email because it's an artifact of a young Mark Zuckerberg – a man who has grown up a lot since he wrote it, and will be in our lives for a very long time.
The fun part is where Zuckerberg says to his lawyer: "Is there a way to do this without making it painfully apparent to him that he's being diluted to 10%?"



The full letter:


[Redacted],
This email should probably be attorney-client privileged, not quite how to do that though.

Anyhow, Sean and I have agreed that a price of one-half cent per share is the way to go for now. We think we can maybe almost justify and if not, we'll just deal with it later.

We also agreed that if the company bonusing us the amount we need for the shares, plus tax, is a good solution to the problem of us all being completely broke.


As far as Eduardo goes, I think it's safe to ask for his permission to make grants.

Especially if we do it in conjunction with raising money (http://articles.businessinsider.com/2012-05-15/tech/31706649_1_mark-zuckerberg-billionaire-facebook-eduardo-saverin#). It's probably even OK to say how many shares we're adding to the pool. It's probably less OK to tell him who's getting the shares, just because he might have adverse reaction initially. But I think we may even be able to make him understand that.

Is there a way to do this without making it painfully apparent to him that he's being diluted to 10%?

OK, that's all for now. I'll send you the list of grants I need made in another email in a second. Sean can send you grants for his people when he stops coughing up his lungs.

Hope you guys both feel better,

Mark

And here's part of the lawyer's response:


…I spent some time discussing the risks associated with making these grants and picking the per share price of common stock. Mark, you and I should discuss these at length to insure that you understand them. I've outlined them below for your easy reference.
The broad categories of legal risk are a) fiduciary duty. As Eduardo is the only shareholder being diluted by the grants issuances there is substantial risk that he may claim the issuances, especially the ones to Dustin and Mark, but also to Sean, are a breach of fiduciary duty later on if not now. I believe that you previously disclosed these future dilutative issuances to Eduardo before the LLC merger. This is what I recommended at the time. Nevertheless, it would be great if there is some way you could obtain a shareholder consent from Eduardo approving these new issuances. It isn't *required* but it would be very advantageous and would go a very long way towards preventing any future claims he might have for breach of fiduciary duty. I mentioned this to Sean and he was going to give it some thought.
In the end, the lawyer was right to worry.

Saverin eventually sued Facebook over breach of fiduciary duty. Facebook and Saverin settled, and he walked away with 4% or 5% of the company. That stake is now worth close to $5 billion.

Meanwhile, Facebook has done pretty well with Zuckerberg running the show with sole authority.

Eight years after its creation, Facebook will raise $15 billion in an IPO this Friday that will value the company at somewhere around $100 billion.



Read more: http://articles.businessinsider.com/2012-05-15/tech/31706649_1_mark-zuckerberg-billionaire-facebook-eduardo-saverin#ixzz1vVMEOGgV