2018-11-30

Digital Winner Microsoft $MSFT, Digital Loser Facebook $FB? (video)

2018's Most Spineless Board

L2inc.com video above published Nov 29, 2018--Scott Galloway's digital winners and losers--it's time for Facebook's Board of Directors to stand on their feet.

$MSFT
$FB
$AAPL
$AMZN
Auto-generated transcript:
00:00  A Winner: Microsoft earlier this week
00:04  Microsoft dethroned Apple even if just
00:07  for a minute as the most valuable firm
00:10  in the US boasting a market
00:11  capitalization north of 800 billion
00:15  dollars to be fair it's not that
00:16  Microsoft passed Apple but that Apple
00:19  fell below Microsoft shedding a quarter
00:21  of a trillion dollars in value as
00:23  analysts wonder if we've reached peak
00:25  iPhone what explains Microsoft success
00:28  or more specifically their staying power
00:31  two things first
00:32  diversity Microsoft maintains a diverse
00:35  revenue stream from software hardware
00:36  and cloud services meanwhile Alphabet
00:40  and Facebook are mostly ad dependent
00:42  Apple is a hardware firm and Amazon
00:44  relies mostly on product sales to
00:47  recurring revenue successful
00:49  organizations have convinced customers
00:51  to enter into a monogamous relationship
00:53  via recurring revenue streams think
00:57  Netflix Spotify and Amazon run what
01:00  Amazon Prime has done with the consumer
01:02  market Microsoft has done with the
01:04  business market visa vie their office
01:06  offering it's much easier to plan a
01:08  business against recurring revenue and
01:10  the market loves it a Loser the Facebook
01:14  Board of Directors our 2018 award for
01:17  most spineless and damaging Board of
01:19  Directors what is the role of a Board of
01:21  Directors care and duty specifically
01:24  serve as fiduciaries for stake holders
01:26  that includes teens that includes the
01:29  Commonwealth and of course shareholders
01:31  who have seen the value of their shares
01:33  shed a third of their value because of
01:36  irresponsible reckless negligent
01:39  behavior on the part of the CEO and the
01:42  CEO oh so at the end of the day what is
01:44  a board supposed to do they decide if
01:46  and when the company gets sold and to
01:48  hire and fire the CEO what has the board
01:51  done here nothing what should they do
01:54  first they should fire Sheryl Sandberg
01:57  the problem with a two-class shareholder
01:59  structure and the reason the SEC should
02:02  revisit the concept of banning all to
02:05  class companies or perhaps making it
02:08  such that when a company punched through
02:10  a hundred billion in market cap it
02:11  reverts to one class of stock
02:13  it has a ripple effect of unintended
02:16  consequences in the unintended
02:17  consequence here is that their COO that
02:20  should have been fired a year ago is
02:22  still here because quite frankly the
02:24  board does not want to be the board that
02:26  fires the woman in a sea of men in big
02:29  tech and that's a legitimate excuse
02:31  however she has made a billion dollars
02:35  and she will move on and do just fine
02:37  every day executives are fired for a
02:39  fraction of the infractions of Miss
02:42  Sandberg and the Zuck at the end of the
02:45  day the person ultimately responsible
02:47  for all of this reckless behavior that
02:49  this company is Mark Zuckerberg and he
02:52  should be removed from the CEO role he
02:55  should likely maintain his chairmanship
02:56  his DNA and programming genius is key to
03:00  retention of the value of this firm he
03:02  deserves to stick around he owned 16% of
03:05  the company however he can be fired and
03:08  this is how he could fight back he
03:11  controls 60% of the voting shares so if
03:13  he is removed from the CEO role it is
03:15  technically feasible that the next day
03:17  he removes the entire board what would
03:20  actually happen play this out the day
03:23  after he is removed from the CEO role he
03:26  fires his entire board that would be
03:29  utter chaos a five-car alarm alerting
03:33  legislators shareholder rights lawsuits
03:36  and governments globally we have to ask
03:38  would in fact the Zuck burn his castle to
03:42  save it the board should not be asking
03:44  this the board should be asking what is
03:47  the right thing to do as Emiliano Zapata
03:49  famously said it is better to die on
03:52  your feet than to live on your knees it
03:54  is time for the Board of Directors at
03:56  Facebook to stand on their feet ....


feedback & comments via twitter @DomainMondo


DISCLAIMER

Domain Mondo posts: