eBay Gets Partial Win in Craigslist Poison Pill Lawsuit
Internet auction giant eBay (EBAY) won't have to swallow Craigslist's poison pill after all, a Delaware Chancery Court ruled on Thursday. According to a Reuters report, the court agreed with eBay's claim that the online classified ads giant illegally enacted a retaliatory plan to dilute eBay's equity stake in the company after eBay decided to enter the classified ad market itself.
The e-commerce giant filed its lawsuit against Craigslist in 2008, seeking to remove the poison pill, and also to regain its seat on Craigslist's board. Craigslist took away eBay's board representation in 2007, the year eBay launched its Kijiji online classified ads service, saying they didn't want to share potential trade secrets with a competitor.
The court handed eBay a partial win, reinstating its ownership stake to 28.4% from the diluted level of 24.85%. However, eBay wasn't so lucky regarding its lost Craigslist board seat: The judge agreed with Craigslist that the company has the right to protect its trade secrets.
