As WMoption and other brokers and analysts anticipated, Mark Zuckerberg and his wife Priscilla Chan have continued to support their own charity fund, with the latest batch of monetary influx being $95 million from the recent sale of Facebook shares. For investors, it means more shares on the market, and for any beneficiaries of the fund in question, it will likely mean easier access to good quality education and medicine.
Last Wednesday, the stock market saw a lot of Facebook shares being sold on behalf of Mark Zuckerberg and his wife, and the cause for this move is reportedly philanthropic in nature. In the true fashion of the modern times, there has been a series of pledges spearheaded by Bill and Melinda Gates, followed by a number of billionaires, saying that after their deaths, a significant portion of their net worth will be distributed to those in need, in accordance with their funds and wishes.
Thankfully, they are all alive and well (for the most part), but this pledge has effectively polarized the public opinion. Some support this initiative, citing it as an inspiration to us all, while others remain more skeptical on this matter and attribute this sudden outburst in charity to a number of tax cuts and legal loopholes.
The total number of Facebook shares that were sold last Wednesday was 760,000 and their estimated worth is roughly $95 million. Naturally, all that money is supposed to go to their charitable organization, the Chan Zuckerberg Initiative. On a side note, the CZI was founded in 2015 after the wealthy couple were blessed with a daughter named Max. In her honor, they have founded an organization that is focused on curing diseases, education, communication and community building.
In their effort to eradicate sickness, improve the learning process, build strong communities that will see the dawn of this new age and bring them together via the medium of the Internet, the couple is willing to part with 99% of their assets – in Facebook and over a period of time that spans across their entire lifespan. Back when they announced it, the net worth of their Facebook shares was estimated at $45 billion; it has since increased by almost one fifth.
So, What Gives?
The plan was to move the 99% of shares to the CZI fund and sell roughly $3 billion’s worth in Facebook shares over the period of three years – and possibly see where it goes from there. This most recent transaction is merely another step in their long-term project and should not affect the stock price in any meaningful way, at least not on its own. Naturally, the market has and will respond to this and similar gestures, and not just for Facebook, either – but this does not mean the prices are going to change that drastically and in such a hasty manner. In fact, the prices should stabilize soon enough, if they haven’t done so already by the time you are reading this.
However, the reason why so many people have come to criticize this move does have some merit on its own, even as Zuckerberg and Chan’s plan unfolds. In fact, many remain convinced that this is in fact some sort of financial scheme aimed at exploiting tax benefits and legal loopholes, while benefiting from an aura of altruism at the same time. Enchanting your own image and making money while you are doing it – what could be better?
Most of these allegations get their ammunition from the fact that the charity fund is technically – and what is more important, legally – a limited ability corporation rather than a non-profit organization. Why? Perhaps because there are rules for non-profit organizations and the way their funds are managed. Many of their defenders point out that a limited ability corporation is superior when it comes to managing funds and allocating them where they are needed the most, and towards any cause that the people in charge of it see fit. And it does not take a genius to figure out who is in charge of this corporation.
So, technically, Zuckerberg and Chan are selling off a portion of their Facebook assets (a huge portion actually, but that does not really matter now) and giving money to themselves in a controlled, calculated manner and in bite-sized portions. The recent one was worth $95 million, and hopefully, this money will get to those in need.