eBay Accuses Craigslist Of Shareholder TricksBy: WebProNews Staff - April 22, 2008
A lawsuit filed in Delaware’s Court of Chancery takes Craigslist to task, as minority shareholder eBay complained of actions by the classifieds site.
Venerated listings site Craigslist lost a little luster in the eyes of eBay, which maintains a stake in the company. Since 2004, eBay held a 28.4 percent interest in the site; Valleywag claimed founder Craig Newmark and CEO Jim Buckmaster hauled in $16 million from that deal.
Owen Thomas suggested the duo would like to increase their shares of Craigslist, keeping more of its profits rather than sharing with eBay. Whatever the situation, and eBay cited confidentiality in not disclosing a reason in a statement about the filing, eBay isn’t happy about it:
In January 2008, however, Newmark and Buckmaster adopted measures that, among other things, unfairly diluted eBay’s economic interest in craigslist by more than 10 percent. By taking these unilateral actions, eBay believes that Newmark and Buckmaster breached their fiduciary duties in violation of Delaware corporate law.
“The recent actions by the craigslist directors have disadvantaged eBay and its investment in craigslist,” said Mike Jacobson, eBay Senior Vice President and General Counsel. “Since negotiating our investment with craigslist’s board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions. We are asking the Delaware court to rescind these recent actions in order to protect eBay’s stockholders and preserve our investment.”
Earlier in April, Classified Intelligence claimed Craigslist will earn in the neighborhood of $81 million in revenue this year, a figure that has not been confirmed. Ebay would have an interest in about $23 million of that figure, less if Newmark and Buckmaster did what eBay claims.