Meta adds risk factor of Mark Zuckerberg’s love for combat sports in annual report

The warning to investors came after Elon Musk’s challenge to take on the Facebook founder in a cage fight in Las Vegas

Elon Musk y Mark Zuckerberg
Meta CEO Mark Zuckerberg, left, and Tesla CEO Elon Musk.AP
Miguel Jiménez

A Bloomberg columnist joked a few months ago that, to avoid potential investor lawsuits, Meta should place warnings in its annual reports and issue prospectuses regarding Mark Zuckerberg’s penchant for judo and other combat sports. At the very least, the journalist argued when Elon Musk’s challenge to a cage fight was on the cards, the lawyers would have fun drafting it. Whether Meta’s advisors read that column or not, the company filed its annual report on February 2 and it lists the company founder’s love of extreme sports as a risk factor.

“We currently depend on the continued services and performance of our key personnel, including Mark Zuckerberg,” the company says in its annual report. " Mr. Zuckerberg and certain other members of management participate in various high-risk activities, such as combat sports, extreme sports, and recreational aviation, which carry the risk of serious injury and death. If Mr. Zuckerberg were to become unavailable for any reason, there could be a material adverse impact on our operations.”

Beyond the Bloomberg columnist, Matt Levine, claiming a triumph, the warning is yet another demonstration of how companies attempt to cover themselves against potential lawsuits for not being transparent in exposing the threats they face to the market in their risk factor chapters. Companies point out very real risks in these documents, but they also let their imaginations run wild with worst-case scenarios.

Meta’s annual report outlines dozens of risks of different types. The chapter devoted to them is 36 pages long, more than a quarter of the entire annual report. The risks listed relate to its product and service offerings, financials, regulation, data, and shareholder structure and range from Zuckerberg’s love of combat sports to the risk of negative news stories about the company.

If a company’s stock falls sharply as a result of an event it failed to warn about in its prospectuses and annual reports, the chances of a class action lawsuit or securities fraud charges multiply. Various U.S. law firms are constantly on the lookout for companies’ stock market declines in case they present an opportunity to file a lawsuit against them that could be joined by their shareholders.

Following Gotham City Research’s bearish attack, Spain’s Grifols acknowledged that at least 13 law firms are preparing class action lawsuits against the company in the United States.

Meta’s previous annual reports warned of the importance of Zuckerberg’s tenure at the company, but without any reference to his hobbies or those of the rest of the management team. That new mention of “combat sports, extreme sports, and recreational aviation, which carry the risk of serious injury and death” comes on the heels of the feud — which ultimately failed to result in a match-up, to the disappointment of many — between Zuckerberg and Tesla chief Musk.

The two challenged each other last June to a cage fight in Las Vegas. Musk threw down the gauntlet and Zuckerberg picked it up. The banter went on for some time until Zuckerberg said, in apparent disappointment, that if Musk wasn’t serious about the bout it was best to move on. In September, Musk biographer Walter Isaacson explained that the challenge was never a serious one: “It’s a total joke. It’s a metaphor. He’s not going into a cage to fight Mark Zuckerberg. He has a schoolboy sense of humor where he trolls people. He makes jokes. And other people don’t understand that one of his personalities is that of a juvenile prankster,” he said in an interview with EL PAÍS.

Even if it’s not against Musk, if Zuckerberg is knocked out in a fight or other such activity that carries “risk of serious injury and death,” the company will be able to say it had issued a fair warning.

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