Television

Myspace founder Greenspan alleges defrauding of shareholders in sale to News Corp

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/tv-images/2016/05/18/Untitled-1_15.jpg?itok=Rr0byu3-

MUMBAI: Brad Greenspan, who is one of the founders of the social networking site Myspace.com, has issued an online report at Freemyspace.com that details how Intermix Media's sale of Myspace intentionally defrauded shareholders out of tens of millions of dollars.

Saying that it is “one of the largest merger and acquisition scandals in US history,” Greenspan is calling for further investigation by the Securities and Exchange Commission, the United States Department of Justice and the United States Senate Committee on Finance. Greenspan served as chairman and CEO when Myspace was created by Intermix.

News Corp had bought MySpace for $580 million last year. Analysts feel that the site could be worth several billion dollars in the next few years. Greenpan, who is Intermix's largest individual shareholder says, “The answer to how News Corp. was fortunate enough to buy one of the largest and most valuable Internet companies for pennies on the dollar is now clear.

“I expect as the authorities get their arms around what happened, that this transaction will be unwound and Myspace will be independent. An independent Myspace is significantly better for its users and shareholders.

“For the first time the public can read what took place behind the scenes and how shareholders were blatantly misled into voting for a quick and unfair sale to News Corp. Deliberate steps were taken to withhold and manipulate information; money was improperly gained and laws were broken. It is my hope that regulatory bodies will begin their investigations quickly before evidence is destroyed.”

 

Greenspan utilised a variety of sources for The Myspace Report, including the two highest non-director senior executives at Intermix, chief financial officer Lisa Terrill and chief operating officer Sherm Atkinson, financial analysts, and Kroll a golden risk consulting company.

The report shows that Intermix CEO Richard Rosenblatt knew before the transaction that Myspace was well on its way to becoming worth at least $20 billion.

“In addition to Rosenblatt's stunning and incriminating emails, the two highest non-director senior executives, chief financial officer Lisa Terrill and chief operating officer Sherm Atkinson, have come forward through their legal counsel indicating significant breaches of fiduciary duty by Rosenblatt and the directors as part of the News Corp. transaction,” continued Greenspan.

The report concludes that certain Intermix board members and senior executives, led by Rosenblatt, blatantly deceived shareholders into voting for a quick sale to News Corp in exchange for broad protection from a string of prior corporate misdeeds and Rosenblatt's understanding that he would share in $20 billion in value post-transaction via his new role at News Corp.

Rosenblatt's scheme was helped in large part because Intermix hid Myspace revenue from shareholders in a blatent violation of FAS 131 (segment reporting disclosure). Greenspan says shareholders were not aware that Myspace's revenue was growing at a 1,200 per cent annualised rate and increasing. Shareholder's were forced to trust the recommendation of Intermix's Board and were under the impression Myspace was unable to turn its massive traffic into revenues.

“A public company that refuses to tell shareholders the revenue of its most valuable asset flies in the face of what it means to be a public company” said Greenspan

Six months after the deal closed, News Corp. disclosed to analysts that Myspace was tracking at $250 million in revenue in 2006 and announced an advertising deal for MySpace with Google for $900 million dollars. Peter Chernin of News Corp. was quoted by the Financial Times on 7 August, 2006: “In one fell swoop we have paid off two-thirds of our Internet investments. We have gotten a 70 per cent premium on our Myspace investment and are now playing with house money."

Says Greenspan, “If Intermix had abided by FAS 131, shareholders would have been able to track the revenue and growth of Myspace and known the property was on pace to hit the eye popping numbers we are now seeing. Myspace didn't magically start generating revenue after the News Corp. transaction, its revenue and growth were tracking to reach $250 million before the acquisition.”

In May 2005 Deutsche Bank outlined for Intermix executives that taking Myspace public could provide value in the $1.028 - $1.7 billion range. Greenspan alleges that Rosenblatt knew that Myspace was on track to become a $20 billion property and purposely withheld this information from shareholders to accelerate the transaction as well as 60 per cent of his stock options at closing for a personal gain of $20 million. 

“News Corp's valuation has increased by $12 billion since the transaction occurred just one year ago, and there are several independent analysts today that agree that Myspace is worth tens of billions of dollars. It is time everyone knew the truth about the ‘hijacking' of Myspace and the individuals responsible for this eye popping theft,” concludes Greenspan.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/ganga.jpg?itok=SbPCInsu
ZEEL to revamp Big Magic, Big Ganga

Zee Entertainment Enterprises Limited (ZEEL) still seems to be in a celebratory mood after its recent 25th year anniversary. After rebranding its entire Zee’s bouquet, the network is soon to revamp the Reliance Broadcast Network Limited’s (RBNL) television business that it acquired in November...

Television TV Channels GECs
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/chndra.jpg?itok=SsRnkyG_
Launch of ZEEL’s lifestyle channels round the corner

Living Foodz, which was first aired in 2015 replacing Zee Entertainment Enterprises Limited’s (ZEEL’s) Khana Khazana channel, will soon have a trio of new channels, adding to the network’s lifestyle bouquet.

Television TV Channels Factual & Documentary
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/spn.jpg?itok=WBljFguF
SPN India recognised as one of the best companies for women in India

Entertainment and sports broadcast network, Sony Pictures Networks India (SPN), has been recognised as one of the best 100 companies for women to work for in India for 2017.

Television TV Channels People
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/anil.jpg?itok=rp4oX9JR
Sabido TV scriptwriting workshop in Mumbai on 23 November

A unique scriptwriting workshop is being organized by the Hong Kong based One Talk Production group in partnership with the indiantelevision.com group from 23-27 November and 29-2 December 2017 in Mumbai.

Television TV Channels GECs
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/charlie.jpg?itok=JcvPrf27
BBC Global news Appoints Charlie Villar as new COO

BBC Global News Ltd, the BBC’s commercially funded international news arm, has announced the appointment of Charlie Villar to its newly-created Chief Operating Officer position.

Television TV Channels People
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/vicom.jpg?itok=XzmI9t6N
Viacom Inc misses EPS forecast but revenue beats expectations

Even as its India business, Viacom18, celebrates its 10th anniversary, Viacom Inc’s stock on Nasdaq came under pressure after missing the earnings per share (EPS) forecast for the fourth quarter ended September 30, 2017. The company also reported financial results for the fiscal year ended...

Television TV Channels English Entertainment
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/Rajesh_Kamat.jpg?itok=nQaRNSaU
People are Viacom18's strongest competitive edge, says Rajesh Kamat

The mood is celebratory at Viacom18’s offices as it readies for its invite-only tenth anniversary bash at Mumbai’s NSCI Dome on the evening of 17 November. The Reliance-Viacom joint venture satellite TV network is ranked among the top five–and probably in the top three in the Hindi GEC space–in...

Television TV Channels GECs
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/Danish_Khan.jpg?itok=8dS0Vx8s
'Porus' will alter the economics of the ecosystem, says SET's Danish Khan

MUMBAI: Gone are the days when high budget would only indicate stellar Bollywood movies. Today, even the Indian television industry is not leaving any stone unturned to give its audience the same feel and quality.

Television TV Channels GECs
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/17/Aditya_Pittie.jpg?itok=n3RxQhyN
Epic TV completes 3 years, launches new show 'Sharanam'

MUMBAI: Commemorating the completion of three years on Indian television on 19 November, infotainment channel Epic TV will add a range of new shows starting with Sharanam, which will be narrated by Juhi Chawla.

Television TV Channels GECs

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories