Will New Legal Claims Against Zuckerberg Harm Facebook's Valuation?
Henry Blodget, over at Business Insider, believes that Paul Ceglia, an early co-developer of a project that became Facebook has a great legal case against Mark Zuckerberg.
...Paul Ceglia has refiled his lawsuit. With a much larger law firm. And a lot more evidence.
And the new evidence is startling.
Ceglia has produced more than a dozen of what he says are emails between him and Mark Zuckerberg from July 2003 to July 2004, the year in which Facebook was created.
In these purported emails, which we have included below, Zuckerberg and Ceglia discuss "the face book" project in detail. They discuss how Ceglia will fund the project. They discuss how Ceglia has funded the project (proof of payment). They discuss how Zuckerberg has met some upperclassmen--the Winklevosses, presumably--who are pursuing a similar project, and how Zuckerberg is "stalling" them. They discuss how Zuckerberg has failed to complete the "face book" project on time. They discuss the launch of the face book, which Ceglia agrees looks great.
The emails then include Zuckerberg telling Ceglia that the Facebook site is not doing well. They include Zuckerberg telling Ceglia that the site has seen so little success that Zuckerberg is thinking of shutting it down. And, in the summer of 2004, they include Zuckerberg offering to send Ceglia his $2,000 of funding back--right at the time Zuckerberg had moved to California to continue to develop, incorporate, and raise money for Facebook.
Ceglia contends that most of what Zuckerberg told him after the launch of the site were lies. (Facebook, as we all now know, went gangbusters right from the beginning). And Ceglia contends that, in the summer of 2004, Zuckerberg "misappropriated" the assets of their general partnership and conveyed them to the corporation that became Facebook, Inc.
Lastly, Ceglia contends that, in accordance with the original agreement, he was entitled to an equal share of Zuckerberg's ownership in the corporation.
We've talked to Facebook about the new evidence, which we'll run through in detail in the following pages. Facebook says the new emails, like the contract, are fake. In a statement to us, Facebook lambasted Ceglia as a "scam artist" and a "convicted felon."
It's a great story. But will it cool investors' ardor for Facebook stock?
We'll see if the next Facebook auction of stock in secondary markets reveals some hesitation...