DealBook: Mark Zuckerberg’s Biggest Challenge Yet


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Facebook’s hands-off approach to President Trump’s posts presents Mark Zuckerberg with the most serious challenge to his leadership in the company’s 15-year history. That’s according to more than a dozen current and former employees who spoke with reporters from The Times.

Hundreds of employees walked out (virtually) from work yesterday, to protest the company’s decision to allow inflammatory posts from the president on its platform.

• “The hateful rhetoric advocating violence against black demonstrators by the U.S. President does not warrant defense under the guise of freedom of expression,” one Facebook employee wrote in an internal message board.

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But who deserves the gains? The Instagram case posed this as a question of shareholders (Mr. Zuckerberg) versus founders (Mr. Krieger and Mr. Systrom). But in the new era of stakeholder capitalism, what about labor, community and others? This question could become more relevant if Mr. Musk moves out of California to a low-tax jurisdiction like Nevada or Texas.

In other words, it’s not about whether Musk deserves the pay but who else shares the rewards along the way.

Yesterday, the Supreme Court unanimously ruled against a hedge fund and a labor union challenging the constitutionality of the board that Congress created in 2016 to repair Puerto Rico’s broken finances. At stake were agreements affecting millions of people on the island and beyond.

“This is a real case about real things,” Justice Samuel Alito said at oral arguments last October. Specifically, it’s about the biggest government bankruptcy in U.S. history, which could set a precedent for pandemic-hit states struggling with debt. Puerto Rico’s financial oversight board filed a plan last year to cut the territory’s debt by a third, from $129 billion to $86 billion.

Justices rejected an effort to undo the restructuring. The hedge fund Aurelius Investment said that the board lacked authority to act because its members weren’t confirmed by the Senate. (The firm spent years fighting Argentina in court for a better deal on that country’s defaulted debt.) Federal appointments require Senate confirmation, but federal officers working in a local capacity — like the board members in Puerto Rico — do not, the justices concluded.

More problems for bondholders loom, with the board recently projecting that it will have $15 billion less than anticipated over the next decade to repay Puerto Rico’s debts, because of the pandemic’s impact on the island’s economy.



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