Kreindler & Kreindler LLP (think $2.7 billion Vioxx settlement) has filed a class action lawsuit on behalf of shareholders of Intermix Media, Inc., which includes MySpace, alleging that current directors, officers and controlling shareholders of Intermix designed a sale to News Corporation that benefited themselves at the expense of the Company and its public shareholders. The class action lawsuit was filed in the Superior Court of the State of California for the County of Los Angeles.
The complaint alleges that instead of attempting to obtain the best terms for Intermix and its shareholders, the defendants structured the transaction to reduce their liability and maximize their gain.
Intermix at $12 a share does seem low (Disclaimer: I own MIX shares). I wonder what a more reasonable price would be?
Intermix Stockholder Meeting Scheduled For September 28.
Link to news release.
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I think fair market value is a LOT lower then 580 million. News corp only bought the company because of myspace and myspace only accounts for 20..25 million a year in revenues. The company could barely break even on 75 million a year in revenues. Sounds like a lot of greedy investors who, who are blinded by traffic numbers. Reminds me of the .gone bubble :)
MySpace could face significant pressure if Facebook’s new high school offering is as wildly successful as their college one. If it takes hold as quickly, then that may have caused MySpace’s traffic to dip as high school students migrate to facebook. While I think that happening is a bit off from now, I think it is a distinct possbility. I detail that new service and consider where they could go from here in this blog post: http://www.minorityrapport.com/2005/09/taking_myspace_.html
Thanks,
Doug
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