Pia Sarkar
SAN FRANCISCO -- Craigslist fired back a response to eBay's(EBAY Quote - Cramer on EBAY - Stock Picks) lawsuit, disputing claims that it's diluting the online auction site's stake.
eBay filed the lawsuit in Delaware Chancery Court on Tuesday, accusing Craiglist's board, including founder Craig Newmark and Chief Executive Jim Buckmaster, of adopting measures in January that "unfairly diluted eBay's economic interest in Craigslist by more than 10%." In 2004, eBay acquired a minority ownership interest in Craigslist of 28.4%. On its blog, privately held Craigslist called eBay's allegations "unfounded" and described them as coming out of the blue. "We have always done our best to protect the well-being of craigslist and the craigslist community, and will continue to do so," the company said on its blog. "ebay has absolutely no reason to feel threatened -- unless a hostile takeover of craigslist, or the sale of ebay's stake in craigslist to an unfriendly party, is their ultimate goal (in which case, they're out of luck!)." eBay's complaint is currently under seal because it contains confidential information about Craigslist. eBay has not specified what actions Craigslist has taken to dilute its stake. Craigslist said it has always treated eBay fairly and will continue to do so "despite this unfortunate development." eBay, on the other hand, argues that Newark and Buckmaster have breached their fiduciary duties. Shares of eBay were down 1.4%, or 42 cents, to $30.47 in afternoon trading. eBay's rival, Amazon(AMZN Quote - Cramer on AMZN - Stock Picks), will post earnings after the close Wednesday. Microsoft(MSFT Quote - Cramer on MSFT - Stock Picks) will report earnings on Thursday. On Tuesday, Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks)beat first-quarter estimates.
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