Comments on: Instagram and the risk of selling low http://blogs.reuters.com/felix-salmon/2012/12/17/instagram-and-the-risk-of-selling-low/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: absinthe http://blogs.reuters.com/felix-salmon/2012/12/17/instagram-and-the-risk-of-selling-low/comment-page-1/#comment-45273 Tue, 18 Dec 2012 07:58:21 +0000 http://blogs.reuters.com/felix-salmon/?p=19859#comment-45273 Yeah I get that they have to take the cash and mix/type of stock into account, but that’s more a matter of risk-adjustment than accepting a ‘low’ offer. I don’t think Systrom could have gotten a better offer, but if that’s the case why the shadiness?

If I had to guess, he set himself up for a higher acquisition cost by minimizing the antitrust concerns very early on. I don’t see any other motivation for refusing to physically take term sheets from other bidders, but IANAL.

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2012/12/17/instagram-and-the-risk-of-selling-low/comment-page-1/#comment-45269 Tue, 18 Dec 2012 01:23:39 +0000 http://blogs.reuters.com/felix-salmon/?p=19859#comment-45269 They have a fiduciary duty to all shareholders, but that doesn’t necessarily mean they have to take the highest offer, especially when they are being paid in shares of a privately held and hard-to-value company. At least Facebook was a month or so away from IPO and the value was easier to approximate. There would have been no way to come up with a reasonable value for twitter shares, and if they took twitter’s offer, and twitter lost 50% of its value by the time they went public, then you would have some lawsuits.

You’re right about selling for less if you get benefits the other shareholders don’t get, but that wasn’t the case here.

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By: absinthe http://blogs.reuters.com/felix-salmon/2012/12/17/instagram-and-the-risk-of-selling-low/comment-page-1/#comment-45259 Mon, 17 Dec 2012 20:21:28 +0000 http://blogs.reuters.com/felix-salmon/?p=19859#comment-45259 Don’t they have a fiduciary responsibility toward the minority shareholders? Just because they have control doesn’t mean they can sell for less than the company is worth, particularly if there’s a side deal where Kevin gets nice personal perks upon joining Facebook (something the minority shareholders don’t benefit from). It *is* a crime (well, maybe a tort) to sell too low if you receive benefits that other equity holders don’t. Otherwise nobody would ever be a minority investor.

Also, it sounds like you agree that he ‘dissembled’ while under oath. From the specifics of the Dealbook article, it sounds as if he actually perjured himself.

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