Zuckerberg’s risky business

Hiya, it’s Alex Barinka, reporting from New York. Mark Zuckerberg tore a ligament in a martial arts fight, got surgery and put it on his Ins [View in browser]( [Bloomberg]( Hiya, it’s Alex Barinka, reporting from New York. Mark Zuckerberg tore a ligament in a martial arts fight, got surgery and put it on his Instagram. Should Meta have told investors? But first… Three things you need to know today: • Shoppers can now [buy directly]( from Amazon on Facebook and Instagram • Russia-linked hackers [claim responsibility]( for a ChatGPT outage • Stability AI [raises](new financing led by Intel Just a torn ligament this time Meta’s Mark Zuckerberg has become increasingly obsessed with formal mixed martial arts fighting, and is training for a competitive fight next year. But the chief executive officer faced a major setback: He tore his ACL in training and underwent surgery to repair it. The [photo]( of his wife Priscilla wiping his brow set off a series of hilarious memes. But there is a serious consideration here about whether [Meta Platforms Inc.](bbg://securities/meta)’s co-founder, CEO and controlling shareholder has a duty to disclose his MMA activities to investors, particularly if formal contests are in his future. What if it’s worse next time? Zuckerberg posted about his surgery on Instagram, and there was no filing or company statement. “It’s a question of materiality,” said Bryan Westhoff, an attorney at Polsinelli PC. “Is it material to a reasonable investor to know what the executives are doing? Is there danger and uniqueness to it? MMA is something that most of us don’t do." It’s not that unreasonable to expect Zuckerberg will get injured again one day. About three in five MMA fights had at least one injury, according to an [article]( published in the Orthopaedic Journal of Sports Medicine that reviewed 503 amateur and professional contests in 2018 and 2019. Zuckerberg’s injury was just during training. He tore a ligament in his knee, a joint that one could argue isn’t necessary to run a social media company (especially if he’s spending time in his virtual reality metaverse). But what about his brain? Head injuries appear to be higher risk if he doesn’t win his fights; of losers’ injuries in the Journal’s review, 17% were concussions. Zuckerberg is something of a key man for Meta, as the company makes clear in its Securities and Exchange Commission filings. “We believe that Mr. Zuckerberg’s role puts him in a unique position: he is synonymous with Meta,” the company said in its latest proxy statement. Losing him would be a risk to the company, its quarterly filings state: “​​We currently depend on the continued services and performance of our key personnel, including Mark Zuckerberg.” The company is willing to pay to protect him, allotting more than $14 million in pretax spending every year for his security. He travels on Meta-backed private jets, including for personal trips, for his own safety. Companies and their boards have a duty to disclose material information to shareholders, but there is no specific [rule]( requiring disclosure of a CEO’s adverse health information (unless he or she is incapacitated). That leaves situations like this up to interpretation. Meta declined to comment on whether it would do so. When it comes to health issues, a company “should consider enhancing the key person risk factors on its next form 10-Q in order to mitigate any risks going forward,” a team of lawyers from Fenwick & West LLP wrote in a memo published by Harvard Law School. “Most risk arises from partial disclosures or ‘half-truths’ — which should be avoided. Sometimes silence with respect to executive health is the best policy.” It’s rare for an executive at Zuckerberg’s level to regularly engage in dangerous physical activity, putting this in a bit of uncharted territory legally. “The potential need for corporate disclosures related to key executives partaking in inherently dangerous activities is not something that is generally discussed on the forefront of corporate disclosure issues,” Polsinelli’s Westhoff said. “This is not a claim that I have seen raised by a plaintiff’s attorney." —[Alex Barinka](mailto:abarinka2@bloomberg.net) The big story Sales for electric vehicles follow partisan divides as Republican strongholds are [less likely to buy](, presenting a challenge for President Joe Biden’s EV push. One to watch Airbnb is rolling out new features and artificial intelligence tools in a product refresh meant to increase listings. [Watch the Bloomberg Technology interview]( with Airbnb CEO Brian Chesky. Get fully charged JPMorgan [is testing]( generative AI tools that can summarize earnings reports, as well as a help desk service for clients. OpenAI is adding data [from other languages and cultures]( to expand public data sets. Google, Meta and TikTok [won a verdict]( in the EU against an Austrian rule forcing platforms to vet illegal content or face fines. More from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Game On]( for reporting on the video game business - [Power On]( for Apple scoops, consumer tech news and more - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Q&AI]( for answers to all your questions about AI Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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