

Yahoo sued for spurning Microsoft - muriithi
http://news.yahoo.com/s/ap/20080222/ap_on_hi_te/yahoo_shareholder_lawsuit

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mixmax
Personally I think the legal system in the US is broken, and this is a good
example. In a sane country you would oust the board of directors if you didn't
agree with them. In the US you sue.

In cases of fraud, deception, etc. suing is of course the right thing to do.
But in this case the board of Yahoo has chosen to reject the offer from
Microsoft based on their belief that the bid was too low. Where exactly is the
wrongdoing in that? You can of course disagree, in which case you should take
it up on the next shareholders meeting, and vote for removal of the board.

But I have a hard time seeing the justification in suing a board for having an
opinion on the valuation of the company. I thought that was what they were
paid to do...

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mercurio
If a board takes a decision on other grounds and neglects its fiduciary duty
to the shareholders, they can sue. This is probably what the people suing feel
has happened. Of course proving it in court is a different matter.

You typically sue to obtain redress for an injury. Firing the board won't make
up for their perceived loss.

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mixmax
Where I'm from you fire the board of directors if you think that they haven't
lived up to expectations, or made as much money as you would like them to. You
don't sue them for injury.

I think this is the best approach for several reasons:

1) The board can actually run the company as they see fit, and not worry about
being bankrupted by a hedge fund that sues them because they have a different
idea of how to run it.

2) A board constantly keeping to the middle of the road and only taking the
choices that are absolutely safe with shareholders stiffle innovation.

3) Control of a company slips from the board to the legal system - which is
definitely not good.

It is a pretty sad state of affairs - I would never want to be on the board of
an American company.

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mercurio
All I'm saying is that you can't take away the right to sue for perceived
harm. Its all very well to declare that the US legal system is broken, but its
not right to say that the shareholders should not be allowed to sue the board
in such cases. Whether the case has merit is precisely the judgement that the
courts are there to make.

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mixmax
"Whether the case has merit is precisely the judgement that the courts are
there to make."

Excellent point. I can only hope for the outcome :-)

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sarosh
There are actually two separate suits. I've put them up on Scribd:

Feb 11 Suit
[http://www.scribd.com/full/2161181?access_key=key-2mavl5upyv...](http://www.scribd.com/full/2161181?access_key=key-2mavl5upyvb75glwlr9s)

Feb 21 Suit
[http://www.scribd.com/full/2161188?access_key=key-1356w5cvyf...](http://www.scribd.com/full/2161188?access_key=key-1356w5cvyfimxv16lee9)

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johnrob
This scenario highlights exactly why I don't buy Google's 'no evil' claim. A
public company exists for one and only one reason - to maximize shareholder
value. In other words, to increase the wealth of random people that nobody in
the company knows.

There is only one reason to take a company public - to make money. An
entrepreneur claiming to go public for any other reason is either naive or
lying.

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daniel-cussen
I wonder why the antitrust division of the DOJ is letting Microsoft buy Yahoo.
I don't care either way, but I wonder why there isn't more of this kind of
debate on the subject.

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rp
The antitrust people would start off by looking at the hypothetical merged
companies percentage of the relevant market. If the the relevant market is
defined as "search," MSFTHOO would create an entity with only a 30% of the
market compared to GOOG's 65% (based on numbers from here:
[http://www.hitwise.com/press-
center/hitwiseHS2004/searchengi...](http://www.hitwise.com/press-
center/hitwiseHS2004/searchengines200711us.php)). This is not to say the FTC
or DOJ wouldn't sandbag such a deal, but how do you gain monopolisitic market
power or anti-competitive effects from a 30% market share? I guess you could
keep blowing up the definition of the relevant market until you captured
MSFT's entire business but that seems dubious.

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whacked_new
Perhaps somebody bought too much YHOO after the news...

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maestro7
And they tell us we dont need toric reform!

