EBay Files Suit Against Craigslist

http://www.nytimes.com/2008/04/22/technology/22cnd-ebay.html?ex=1366603200&en=61488ae8a64a3aeb&ei=5088&partner=rssnyt&emc=rss

by raghus • 18 years ago

38 11 18 years ago

nytimes.com

eb• 18 years ago

This isn't really news without any details.

breily• 18 years ago

There's some info here - http://www.alleyinsider.com/2008/4/craigslist_investor_ebay_... - if you don't feel like logging into NYTimes.

redorb• 18 years ago

I didn't have to log in, I thought they were doing away with content behind logins anyway, also I can't fault Ebay for suing if they were getting devauled in the deal with no returns; This move makes Ebay look evil

DaniFong2• 18 years ago

Didn't they buy that stock from an ex-employee, not craigslist directly?

mlinsey2• 18 years ago

Does it matter? I would think that all the relevant rights and responsibilities to shareholders would be the same no matter who the stock was bought from, but I'm not an expert in the matter.

dbreunig• 18 years ago

It might not be another investor...it could be that Craig and co. didn't want to earn revenue in a manner that eBay would have liked.

kawika• 18 years ago

Whatever the particulars or merits of the suit, I'm sure Craigslist fans will stand by the company -- especially with company notices titled "Tainted Love." Classic.

Harkins• 18 years ago

Hey, reminds me of Cryptonomicon. Let's see...

The math is pretty simple here. The Dentist [eBay] has a way to claim damages from Epiphyte [Craigslist]. The amount of those damages is x, where x is what the Dentist, as a minority shareholder, would have made in capital gains if Randy had been responsible enough to write a better contract with Semper Marine [if Newmark and Buckmaster hadn't unfairly diluted their ownership]. If such a contract had specified a fifty-fifty split, then x would be equal to fifty percent of the cash value of the wreck times the one tenth of Epiphyte that the Dentist owns minus a few percent for taxes and other frictional effects of the real world [Ebay says: Can you believe all the revenue opportunities that Craiglist has passed on!?]. So if there's ten million dollars in the wreck, then x works out to around half a million bucks.

In order for the Dentist to gain control of Epiphyte, he has to acquire an additional forty [23] percent of its stock. The price of that stock (if it were for sale) is simply 0.4 [0.23] times the total value of Epiphyte. Call it y.

If x > y, the Dentist wins. Because then the judge is going to say, "You, Epiphyte, owe this poor aggrieved minority shareholder $x. But as I look at the parlous state of the corporation's finances I see that there's no way for you to raise that kind of money. And so the only way to settle the debt is to give the plaintiff the one asset you have in abundance, which is your crappy stock. And since the value of the whole corporation is really, really close to being zero, you're going to have to give him almost all of it."

EBay Files Suit Against Craigslist

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