Judge Says Craigslist Can't Just Dilute eBay Off Its Board, But Can Keep eBay Off The Board Otherwise [Updated]

from the that's-not-how-it-works dept

Thu, Sep 9th 2010 5:09pm — Mike Masnick

We were pretty skeptical two plus years ago when the details came out concerning the lawsuit between eBay and Craigslist over Craigslist's decision to exclude an eBay representative from its board to unilaterally diluting eBay and ignoring a proposed new board member, while holding board meetings without him. As we said at the time, it's quite clear why Craigslist did what it did, but that doesn't make it legal. And, in fact, a judge has now ruled in eBay's favor, rescinding the poison pill anti-takeover rules that Craigslist's board passed without eBay present. The whole situation really is a bit of a mess, and while I think Craigslist was wrong to take the actions it took here, it does make you wonder if eBay should recognize that having a board member on Craigslist's board is too big a conflict of interest. Updated: The original coverage of this news was a bit vague, but now the details are coming out, and the report is mixed: the dilution was rolled back, so eBay still owns the larger percentage, but eBay has been kept off Craigslist's board for now...

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Filed Under: competition, dilution
Companies: craigslist, ebay

7 Comments

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Koder Kev (profile), 9 Sep 2010 @ 8:32pm

Couldn't understand the headline at first.
I think the word you were looking for was "deluded," instead of "diluted." The former means "to mislead" where the latter means "to make weaker (usually by the addition of water)."
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Anonymous Coward, 9 Sep 2010 @ 8:44pm

Re: Couldn't understand the headline at first.
how is that a problem?
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Mike Masnick (profile), 9 Sep 2010 @ 8:46pm

Re: Couldn't understand the headline at first.
I think the word you were looking for was "deluded," instead of "diluted." The former means "to mislead" where the latter means "to make weaker (usually by the addition of water)."

No, diluted is the right term. The existing Craigslist board effectively added more overall shares to the company, which weakened the ownership of eBay's stake from 28% to below 25%. So, it's like adding water... just that it's equity, not water.
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cocokiss, 9 Sep 2010 @ 10:12pm

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Koder Kev (profile), 10 Sep 2010 @ 10:07am

Re: Re: Couldn't understand the headline at first.
Oh, I see. Thanks for clearing that up!

Kevin
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SomeoneInMyHeadAndItsNotMe, 10 Sep 2010 @ 4:26pm

Re: Couldn't understand the headline at first.
If you have a mixture of X and Y, you can dilute the mixture of its Y element either by increasing the X element or decreasing the Y element. In this case, ebay was the Y element, and the board was diluted of it by removal of said element. Your post makes no sense. Who was misleading whom?
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Coward#2, 29 May 2011 @ 12:50am

Re: Couldn't understand the headline at first.
The headline is correct! Read a finance book.
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