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April 22, 2008

When Meg Sued Craig: Ebay vs. Craigslist

Now this is a strange story. Apparently Craigslist's founders, never ones to follow the orthodox economic path, did something back in January to dilute Ebay's 28.4% minority stake in their fast-growing company. Here is a quote from the NYT:

In a statement released Tuesday, eBay said that in January, Craigslist’s two directors, the founder Craig Newmark and the chief executive, Jim Buckmaster, took actions that unfairly diluted eBay’s economic interest in the company. eBay did not specify what those actions were.

What could Craig, et al., have done to piss off Meg and company back at Ebay HQ so much that they would take Craig & Co. to court? Did they sell a stake to someone else quietly? Did they bring about some sort of poison pill? A new class of shares? Sell Craigslist stakes on Craiglist?

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