Mark Zuckerberg is Not the CEO of Facebook

If Facebook's chief executive is merely a figurehead, who is really in charge of the social media empire? Trip Chowdhry, the Managing Director of Equity Research at Global Equities Research, wondered the same thing. "I think maybe the question has to be asked: who is running the show at Facebook?" Chowdhry questioned during an interview with Benzinga. "Is it Mark Zuckerberg, or the VCs who are in Facebook? That is a very big question to be answered." Chowdhry takes issue with Facebook's decision to spend $1 billion to acquire Instagram. "Do you think any person of sane mind would buy a 10-people company with zero revenues for a billion dollars?" Chowdhry asked. "Who would buy something [like that]? The VCs. Why? They are buying one bubble company with another bubble currency." Chowdhry said that the big problem for investors is none other than Mark Zuckerberg, who is not only promoted as the CEO of Facebook, but is portrayed as the man who is in charge of the company. "I believe [he] is just a figurehead," said Chowdhry. "Facebook FB is being run by the VCs, and what Facebook is ending up being is a bailout sink for the VC investors' investments." Further, Chowdhry said that the company is a "sinkhole for all the VCs who have put their money in other companies." The venture capitalists will then dump their "good or bad companies" into Facebook, Chowdhry explained. "That tells me that Mark Zuckerberg is not in control," said Chowdhry. "I could also have a $1 billion valuation, and my business model can be very simple. For every one dollar you give me, I'll give you one dollar and twenty five cents. Don't you think I'd also have a revenue stream of $1 billion? Almost every person on the planet [would] be my customer. If you give me $1, I give you $1.25, you will not lose anything, don't you think I can….have an infinite number of users? Same as this company. They have zero revenues. Everything is free." Chowdhry said that to justify the "bubbly valuation" that Facebook is getting, the company has to buy up more "bubbly" companies. "It breaks all common sense," he said. "I just want any one person in the world to tell me why it was one billion dollars." Follow me @LouisBedigian