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What a scumbag thing to do to your investors. How long before we see the post from Craig Newmark entitled "How I Should Have Screwed eBay When They Invested In

What a scumbag thing to do to your investors. How long before we see the post from Craig Newmark entitled "How I Should Have Screwed eBay When They Invested In Me" With a post on HN entitled "How being a geek made it hard to maintain fiduciary duty to shareholders." Craig isn't handicapped by being a geek, he's handicapped by being a cheat. Calling him a geek gives the rest of us a bad name. Edit: Based on the discussion below I think ebay should have never gotten involved with CL in the first place. I still believe it was wrong for Craig to pull these tactics but eBay isn't so innocent either. ebay shouldn't have injected itself into such a hostel situation without a better plan. Edit2: Reading more about the case it looks like craig won in the end anyway. The shares in the business can't be worth much because future investors will be scared they won't be able to get a board seat or have much influence in the business. Why would someone else want to invest in CL? From what I can see that's just what Craig would like.

justinchen 16y ago
From what I remember ebay became an unwelcome investor when one the founding members sold their stake to ebay. I remember there was a lot of drama as Craig tried to block the transaction.
- MichaelApproved 16y ago
  It's unfortunate that eBay injected themselves in a situation like that. They made other stupid purchases (Skype) and should have done a better job learning who Craig is, what he believes in and the friction it would create. I would also hate to have an unwelcomed investor in my business. Company culture is important and it sounds like what eBay stands for runs counter to what Craig was trying to create. Having said that, it still doesn't give him the right to cheat them out of what they bought.
gigafemtonano 16y ago
eBay never invested in craigslist, they bought shares from an executive who left the company.
- MichaelApproved 16y ago
  Since when is buying shares and investing two different things? What difference does it make how they got invested in the company. They hold shares in the business and should be protected from dirty tricks.
  - koeselitz 16y ago
    It's two different things when you buy shares specifically in order to try to destroy the company you're buying shares in. It's pretty obvious that's what Ebay was trying to do, and it's not weird or strange for Craigslist to want to keep that from happening. Frankly, it's sort of surprising to me that there aren't laws in Delaware against hostile shareholding, but it guess it is Delaware; there's a reason most corporations choose that state as a base.
    - MichaelApproved 16y ago
      You say it's pretty obvious what ebay was trying to do but it's not obvious to me and I can't see the evil in their intentions. What were they doing that was going to destroy the company?
      - gojomo 16y ago
        Have you read Craigslist's countersuit? http://blog.craigslist.org/2008/05/unlawful-and-unfair/ http://blog.craigslist.org/2008/05/unlawful-and-unfair/ Craigslist alleged eBay specifically put key managers of eBay's Craigslist competitor, Kijiji, into the Craigslist board seat. Here, also, is better coverage of the decision: http://www.bloomberg.com/news/2010-09-09/ebay-wins-lawsuit-against-craigslist-over-board-seat-that-was-taken-away.html http://www.bloomberg.com/news/2010-09-09/ebay-wins-lawsuit-a... It wasn't a rout for eBay; the judge seems to have agreed with Craigslist on the critical issue of a board seat for eBay: On the question of EBay’s seat on Craigslist’s board, Chandler found that the agreement covering EBay’s investment didn’t guarantee it a director’s spot. The agreement specifically stated that if EBay started competing with Craigslist in the U.S. market for classified advertising, the minority shareholder couldn’t stop efforts to remove the board seat, Chandler said. EBay’s claims over the seat amounted to an “attempt to obtain a permanent board seat through litigation, when it could not obtain a permanent board seat through arms-length negotiations,” the judge said.
gojomo 16y ago
Craigslist never wanted eBay as a shareholder; they tried to block the private sale to eBay, or buy the shares back for the company. I believe I read something at the time that suggested Newmark and Buckmaster eventually reached a compromise with the former employee and eBay, that may have also involved other side payments and some sort of agreement on eBay's participation. Clearly, eBay's later actions violated what Craigslist expected, and then Craigslists' equity manipulations violated what eBay expected. As an outsider without all the details, throwing insults like 'scumbag' is a bit harsh. Craigslist tried an aggressive legal maneuver in a business dispute; they lost this round. Perhaps they would prevail on another lawsuit about eBay's duties as a Craigslist board member. That the two sides have a dispute doesn't mean anyone's a villain; that any side loses a court ruling doesn't mean their tactics were evil or even unreasonable at the time with what they believed.

justinchen 16y ago

From what I remember ebay became an unwelcome investor when one the founding members sold their stake to ebay. I remember there was a lot of drama as Craig tried to block the transaction.

MichaelApproved 16y ago
It's unfortunate that eBay injected themselves in a situation like that. They made other stupid purchases (Skype) and should have done a better job learning who Craig is, what he believes in and the friction it would create. I would also hate to have an unwelcomed investor in my business. Company culture is important and it sounds like what eBay stands for runs counter to what Craig was trying to create. Having said that, it still doesn't give him the right to cheat them out of what they bought.

gigafemtonano 16y ago

eBay never invested in craigslist, they bought shares from an executive who left the company.

MichaelApproved 16y ago
Since when is buying shares and investing two different things? What difference does it make how they got invested in the company. They hold shares in the business and should be protected from dirty tricks.
- koeselitz 16y ago
  It's two different things when you buy shares specifically in order to try to destroy the company you're buying shares in. It's pretty obvious that's what Ebay was trying to do, and it's not weird or strange for Craigslist to want to keep that from happening. Frankly, it's sort of surprising to me that there aren't laws in Delaware against hostile shareholding, but it guess it is Delaware; there's a reason most corporations choose that state as a base.
  - MichaelApproved 16y ago
    You say it's pretty obvious what ebay was trying to do but it's not obvious to me and I can't see the evil in their intentions. What were they doing that was going to destroy the company?
    - gojomo 16y ago
      Have you read Craigslist's countersuit? http://blog.craigslist.org/2008/05/unlawful-and-unfair/ http://blog.craigslist.org/2008/05/unlawful-and-unfair/ Craigslist alleged eBay specifically put key managers of eBay's Craigslist competitor, Kijiji, into the Craigslist board seat. Here, also, is better coverage of the decision: http://www.bloomberg.com/news/2010-09-09/ebay-wins-lawsuit-against-craigslist-over-board-seat-that-was-taken-away.html http://www.bloomberg.com/news/2010-09-09/ebay-wins-lawsuit-a... It wasn't a rout for eBay; the judge seems to have agreed with Craigslist on the critical issue of a board seat for eBay: On the question of EBay’s seat on Craigslist’s board, Chandler found that the agreement covering EBay’s investment didn’t guarantee it a director’s spot. The agreement specifically stated that if EBay started competing with Craigslist in the U.S. market for classified advertising, the minority shareholder couldn’t stop efforts to remove the board seat, Chandler said. EBay’s claims over the seat amounted to an “attempt to obtain a permanent board seat through litigation, when it could not obtain a permanent board seat through arms-length negotiations,” the judge said.

gojomo 16y ago

Craigslist never wanted eBay as a shareholder; they tried to block the private sale to eBay, or buy the shares back for the company. I believe I read something at the time that suggested Newmark and Buckmaster eventually reached a compromise with the former employee and eBay, that may have also involved other side payments and some sort of agreement on eBay's participation. Clearly, eBay's later actions violated what Craigslist expected, and then Craigslists' equity manipulations violated what eBay expected. As an outsider without all the details, throwing insults like 'scumbag' is a bit harsh. Craigslist tried an aggressive legal maneuver in a business dispute; they lost this round. Perhaps they would prevail on another lawsuit about eBay's duties as a Craigslist board member. That the two sides have a dispute doesn't mean anyone's a villain; that any side loses a court ruling doesn't mean their tactics were evil or even unreasonable at the time with what they believed.