Ex-MySpace CEO Wants More
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Former Intermix Chairman and CEO Brad Greenspan is back on his soapbox, claiming that News Corp.'s MySpace acquisition burned shareholders.
In a report issued today, Greenspan claims Intermix Media dealmakers sold the company cheap for personal gain.
Greenspan goes on to call for further investigation by the Securities and Exchange Commission, the United States Department of Justice and the United States Senate Committee on Finance.
"Shareholders were blatantly misled into voting for a quick and unfair sale to News Corp.," Greenspan said in a statement detailing his many and varied accusations.
The primary agent of all this shady business, in Greenspan's version of the story, was the CEO who replaced him at Intermix, Richard Rosenblatt.
Greenspan claims that Rosenblatt knew MySpace was worth more than News Corp.'s offer, but was willing to accept the $580 million in order to cash $20 million in stock options and take on a new role at News Corp.
Greenspan's cites what he calls "stunning and incriminating emails" Rosenblatt sent before completing the deal.
"This is your show and I am looking forward to supporting the 20B dream!" Rosenblatt wrote to News Corp.'s Ross Levinsohn four days before signing the deal.
Greenspan also accuse Rosenblatt of making sure shareholders were not aware that MySpace's revenue was growing at a 1,200 percent annualized rate and increasing.
Further, Greenspan said Intermix deliberately misled media giant Viacom in its effort to outbid News Corp.
He also argued that Intermix broke the law by not initiating an auction or shopping process for its acquisition.
Sources for Greenspan's report also include Intermix CFO Lisa Terrill and COO Sherm Atkinson, financial analysts, and Kroll, Inc., a golden risk consulting company.
A Fox Interactive Media spokesperson told internetnews.com it's all "sour grapes."
"It's unfortunate that Mr. Greenspan continues to issue press releases complaining about a deal that many industry experts initially believed was a risk for News Corp to take," the spokesperson said.
"We've strategically built this business since the acquisition and are just now beginning to realize real financial value."
Some ridiculed News Corp. for paying $580 million to acquire Intermix Media and its MySpace property.
But Greenspan always told anyone who would listen that the price criminally undervalued the company.
MySpace is certainly worth more than $580 million today.
A week ago, an RBC Capital markets analyst said MySpace might be worth $15 billion. In August, Google agreed to pay $900 million for the right to sell advertising for MySpace.
But social networks are notoriously difficult to value, making News Corp.'s MySpace acquisition seem risky to some even in hindsight.