eBay sues Craigslist
The online auction house took out its legal guns and fired a lawsuit against Craigslist, accusing the latter of having diluted eBay's stake.
April 23, 2008
EBay claims in its filing that Newmark and Buckmaster adopted measures that, among other things, unfairly diluted eBay's economic interest in craigslist by more than 10 percent. The auction site became part of Craigslist's in 2004, when it purchased a minority ownership interest of 28.4%.
"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."
The complaint is being filed under seal because some of the information about craigslist contained in the complaint is governed by confidentiality restrictions.
Craigslist's first answer came as a blog post dubbed Tainted Love:
“We are surprised and disappointed by Ebay’s unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us.
Ebay has absolutely no reason to feel threatened here — unless of course they’re contemplating a hostile takeover of craigslist, or the sale of Ebay’s stake in craigslist to an unfriendly party. (In which case, they’re out of luck.)”