A Bloomberg columnist joked a few months ago that Meta should warn about Mark Zuckerberg's love of judo and other martial arts in its annual reports and brochures to avoid potential investor lawsuits. At least, he argued, the lawyers would have some fun writing the note if Elon Musk's challenge to a cage fight was up in the air. Whether Meta's advisers read this column or not, the company released its annual report last Friday, which cited the company's founder and leader's penchant for high-risk sports as a risk factor.
“We are currently dependent on the continuity of service and performance of our key personnel, including Mark Zuckerberg,” it said in its annual report. “Mr. Zuckerberg and certain other members of management engage in a variety of high-risk activities, such as martial arts, extreme sports and recreational aviation, that involve the risk of serious injury or death. If Mr. Zuckerberg is unavailable for any reason, this could have a material adverse impact on our business,” he added.
Aside from the fact that the Bloomberg columnist declared victory, the warning collected is further evidence of how companies, in their chapters on risk factors, try to protect themselves from possible lawsuits for disclosing to the market the threats they face have not been presented transparently. In these chapters, companies point out very real risks, but also let their imagination run wild and imagine the worst-case scenario.
Dozens of risks of different types are described in Meta's annual report. The chapter dedicated to them takes up 36 pages, more than a quarter of the entire annual report. The risks listed relate to the product and service offering, finances, regulation, data and ownership structure and range from Zuckerberg's love of martial arts to the risk of negative news being published about the company.
If a company's stock falls sharply because of an event whose risk was not warned about in its prospectuses and annual reports, the likelihood of a class action lawsuit or securities fraud charge multiplying. Responsible for the company. Several American law firms constantly monitor the decline in the share price of companies if they are offered the opportunity to file a lawsuit against them, which their shareholders join. Following Gotham City Research's pessimistic attack, Spanish company Grifols admitted that at least 13 law firms are preparing class action lawsuits against the company in the United States.
In Meta's previous annual reports, they warned of the importance that Mark Zuckerberg's stay at the company had for the company, but without reference to his hobbies or those of the rest of the management team. This renewed mention of “risky activities such as martial arts, extreme sports and recreational flying” comes after what was ultimately, to the disappointment of many, a purely dialectical dispute between Zuckerberg and Tesla boss Elon Musk.
The two challenged each other online to a cage fight in Las Vegas in June. Musk threw down the gauntlet and Zuckerberg picked it up. The jokes continued for some time until, apparently disappointed, Zuckerberg said that if the fight never happened, it would be better to turn the page. In September, Musk's biographer Walter Isaacson explained that the challenge was never serious: “It's a total joke. It is a metaphor. He won't enter a cage to fight Mark Zuckerberg. He has the humor of a schoolboy when he trolls people. Make jokes. And other people don’t understand that one of his personalities is that of a teenage prankster,” he said in an interview with EL PAÍS.
Even if it doesn't target Elon Musk, the company can say it has already warned if Zuckerberg becomes unconscious in a fight or any of these activities, which carry “the risk of serious injury and death.”
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