Meta shareholders have sued Mark Zuckerberg and the rest of Meta’s board to stop a plan for a new class of non-voting shares. They filed the class action in the Delaware Court of Chancery on Tuesday, 27 October. Ryan Knappenberger reported it for Courthouse News.
The plaintiffs are two Steamfitters Local 449 funds and two individual investors, Bruce Taylor and Ronald Mumme. They sue on behalf of Meta’s Class A stockholders. They want the court to block the plan before it takes effect on 19 January 2027, when more than 2.5 billion Class C shares would start trading.
“Zuckerberg has always been fixated with his control over Meta,” the plaintiffs wrote in the complaint.
What the shareholders claim
Under the plan, every shareholder gets one non-voting Class C share for each share they own. Zuckerberg can sell his new shares to pay California’s proposed wealth tax. He controls 60.6% of Meta’s votes through his ten-vote Class B shares.
The complaint accuses Zuckerberg of breaching his duties as Meta’s controlling shareholder, and all 12 directors of approving unfair terms. Directors Robert Kimmitt, Charlie Songhurst and Tony Xu formed the special committee that negotiated the deal. The complaint says they lacked independence from him. Xu has given at least $2m to a political committee fighting the tax, it adds.
According to the complaint, Zuckerberg “bullied” the committee. It says he threatened to block any issue of new voting shares to fund Meta’s plans, and to move out of California. The plaintiffs call the move threat empty, because the tax applies to people who lived in California on 1 January 2026.
From 20 shares to one, and back up
The complaint, which draws on Meta’s own filing, sets out how the talks went. In August, Zuckerberg asked for 20 new Class C shares for every existing share, plus a pay package. The committee called that “excessive”. It offered a dividend that would be paid only if the tax passed, sized to cover the bill.
On 1 September, the committee said a dividend of about one share for every nine was “the limit” of what it could offer. That would have been worth roughly $20bn to Zuckerberg. Its members discussed dissolving the committee or resigning from the board. At a board dinner on 9 September, Zuckerberg said he would list his Palo Alto home for sale on 13 September. On 14 September, the committee agreed to one share for one, nine times its limit.
The $700bn alternative
The plaintiffs say Meta did not need the new shares to raise money. The committee’s banker, Moelis, told it that Meta could sell about $700bn of ordinary voting stock over several years, the complaint says. Zuckerberg’s voting power would still stay above 50%. The committee never asked Moelis for a fairness opinion, the complaint says.
Zuckerberg’s lawyers argued that sovereign investors could not buy voting stock. The complaint calls that “spurious”, noting that Norway’s sovereign wealth fund already holds about 1.5% of Meta’s Class A shares.
A $23.8bn sale, no vote
Zuckerberg can sell 20% of his new Class C shares straight away without giving up any votes. Those shares are worth about $23.8bn, the plaintiffs say. He can sell the rest in quarterly batches over eight years.
He also gets more Class C shares each time the stock doubles. The plaintiffs say that target is “spring-loaded”. It is measured from $580.60, an average of prices from 29 July to 9 September. Most of that period came before Meta launched its Muse AI agent. By 24 September, Meta’s shares were 33.9% above that price.
Class A shareholders got no vote. Zuckerberg approved the plan himself by written consent. Since 2014, a majority of independent shareholders has backed each of 13 proposals for one vote per share, and his votes defeated them all, the complaint says. Meta’s shares fell more than 9.6% in the three trading days after the plan was announced, it adds.
“Zuckerberg receives immediate and continuing opportunities to monetize his Meta equity while retaining majority voting control,” the complaint says.
Meta’s position
No court has ruled on the plaintiffs’ claims. Meta defended the plan when it announced it, in a statement to CNBC.
“There were many driving factors that led the board and special committee to approve the Class C shares, and it would be misleading to attribute it to any single reason,” Meta said.
Meta’s filing said the new shares let the company raise money without diluting Zuckerberg’s control. On Monday, Meta launched a $35bn share sale to fund its AI spending.
The plaintiffs point to a ruling by the same court on 16 October, which blocked a similar share plan at Cloudflare. Californians vote on the tax, Proposition 40, on 3 November. By July, tech billionaires had put $120m into defeating the tax.