3 ms·

Not Statute, but case law. See eBay vs. Newmark. Unless I'm misinterpreting something about it, in which case, can you explain? (Genuine question there.)

gowld 8y ago
Choose an article to read from these results: https://www.google.com/search?q=myth+maximize+shareholder+value https://www.google.com/search?q=myth+maximize+shareholder+va...
- Mononokay 8y ago
  Literally every one of those goes against current case law, which can be seen in eBay v. Newmark; plus "LMGTFY" isn't really an explanation.
  - snowwrestler 8y ago
    I think it is instructive that while eBay was able to void the Craigslist poison pill provision in court, they have not been able to, for example, sue Craigslist into increasing revenue and profit by charging a per-listing fee on "for sale" items. To my knowledge eBay hasn't even tried that--no doubt because they know it would be futile. The practical question is not necessarily whether Craigslist has a duty to maximize shareholder value, but rather, to what extent can shareholders use the courts to second-guess the business decisions of corporate management? As the links in the Google search above attest, decades of precedent seems to suggest: almost no extent at all. To look at another high-profile example, Apple CEO Tim Cook--in a shareholders meeting!--said "When we work on making our devices accessible by the blind, I don't consider the bloody ROI. If you want me to do things only for ROI reasons, you should get out of this stock." While it made some news, I don't recall a shareholder lawsuit forcing Tim out of Apple for refusing to maximize shareholder value.
icebraining 8y ago
The opinion is quite readable. Essentially the judge says that he's only applying that standard (called the Unocal test) on "defensive actions by a target corporation’s board of directors in a takeover context". On the action that didn't fit that profile, despite being potentially harmful to eBay, he deferred to their best judgment. I'm no lawyer, but the way I read that decision is: do what you think best, just don't purposefully mine the field against one of your shareholders.

gowld 8y ago

Choose an article to read from these results: https://www.google.com/search?q=myth+maximize+shareholder+value https://www.google.com/search?q=myth+maximize+shareholder+va...

Mononokay 8y ago
Literally every one of those goes against current case law, which can be seen in eBay v. Newmark; plus "LMGTFY" isn't really an explanation.
- snowwrestler 8y ago
  I think it is instructive that while eBay was able to void the Craigslist poison pill provision in court, they have not been able to, for example, sue Craigslist into increasing revenue and profit by charging a per-listing fee on "for sale" items. To my knowledge eBay hasn't even tried that--no doubt because they know it would be futile. The practical question is not necessarily whether Craigslist has a duty to maximize shareholder value, but rather, to what extent can shareholders use the courts to second-guess the business decisions of corporate management? As the links in the Google search above attest, decades of precedent seems to suggest: almost no extent at all. To look at another high-profile example, Apple CEO Tim Cook--in a shareholders meeting!--said "When we work on making our devices accessible by the blind, I don't consider the bloody ROI. If you want me to do things only for ROI reasons, you should get out of this stock." While it made some news, I don't recall a shareholder lawsuit forcing Tim out of Apple for refusing to maximize shareholder value.

icebraining 8y ago

The opinion is quite readable. Essentially the judge says that he's only applying that standard (called the Unocal test) on "defensive actions by a target corporation’s board of directors in a takeover context". On the action that didn't fit that profile, despite being potentially harmful to eBay, he deferred to their best judgment. I'm no lawyer, but the way I read that decision is: do what you think best, just don't purposefully mine the field against one of your shareholders.