Facebook IPO reveals risks

network giant, Facebook's IPO filing brought to light major risks that could either make or break the multibillion-dollar social network, International Business Times reports.

The social network's founder, Mark Zuckerberg, owns 28.2% of Facebook shares, the largest single stake in the company. At a valuation of $100 billion for Facebook, Zuckerberg's stock would be worth $28 billion.

While some of the major risks listed involve government regulation, censorship in foreign countries and "unfavourable media coverage", the most unexpected threat apparently comes from Facebook's very own founder.

In a Bloomberg Businessweek report, Charles Elson, a University of Delaware corporate-governance professor, says Zuckerberg's control means directors and shareholders will have less sway over the company's direction.

“The public has no say in the control of the board, which, in my view, is terribly harmful to any notion of accountability,” notes Elson. “It's very troubling to investors, and it's a bad bet for them.”

The 27-year-old Zuckerberg controls 57% of the voting shares after other shareholders granted their voting rights to him by irrevocable proxy, AFP states.

"Because Zuckerberg controls a majority of our outstanding voting power, we are a controlled company under the corporate governance rules for publicly-listed companies," indicates the Facebook filing.