As Facebook’s value on Wall Street continues to fall, critics have wondered if the problems facing the social network are too big for Co-Founder and CEO Mark Zuckerberg to solve. The Los Angeles Times published a story Friday, asking if Zuckerberg should step aside to let someone more experienced run Facebook. NBC notes that several other critics feel similar sentiments.
After finishing Thursday valued at $19.87 per share, Facebook stock continued to plummet Friday, reaching $19.01 at one point — just about one-half of the $38 value announced at the company’s initial public offering.
The L.A. Times, in a story by Walter Hamilton and Jessica Guynn, wondered if Zuckerberg has the know-how and maturity to guide Facebook through this troubling time. They offered a scenario where Zuckerberg still runs the creative side of the social network, but leaves the business part to someone with more experience handling dollars and cents:
Only some of those problems are attributable to Zuckerberg, analysts say. And given that he is the company’s largest shareholder, with ironclad control over all decisions, nothing would happen without Zuckerberg’s assent.
Still, restless investors blame Zuckerberg for several missteps, such as pricing the IPO at a stratospheric $100 billion valuation.
Facebook boosted its IPO price days before the offering, with several large shareholders selling unexpectedly large chunks of their holdings. The moves were seen as siphoning extra profit for the company and big shareholders at the expense of subsequent investors.
The enormous valuation left Facebook little room for error, and it was seen as hubris by a company that at the time saw few obstacles in its path.
Zuckerberg’s indifference to traditional corporate etiquette — he wore sneakers and his trademark hoodie for Facebook’s first big investor meeting — is viewed as disrespectful of the corporate world he needs to win over.
This has happened before, though. The L.A. Times compared Zuckerberg’s situation to that of former Apple CEO Steve Jobs, who faced similar criticism early in his career, but rebounded to become a force in the tech world. Both Zuckerberg and Jobs eschewed formal attire for more comfortable clothing — a hoodie for Zuckerberg, a turtleneck sweater and jeans for Jobs. If Zuckerberg steps back now, he can still rebound to grow the company later, much like Jobs did with Apple.
New York magazine editor John Heilemann agreed with the Jobs-Zuckerberg comparison, but feels that now is probably not the best time for Zuck to be in charge:
He’s built an incredible thing but he may or may not be up to the job right now. But at that age, Steve Jobs got kicked out of the board because people said the same thing about him, and then he came back and became one of the great CEOs of tech history.
Quoted in the Times story is Dan Alpert of New York investment bank Westwood Capital, who felt that Zuckerberg should be given some more time to prove his doubters wrong.
This is not the first time Facebook has been criticized for a lack of experience in its upper levels.
Readers: Do you feel that Zuckerberg should take a break from running the company, or has he earned the right to try to lead Facebook out of difficult times?