"[This
is] one of the largest merger and acquisition scandals in US
history," he said. He wants the deal to be investigated by the US
financial regulator the Security and Exchange Commission, the
Department of Justice and the Senate Committee on Finance.
Greenspan alleges that the management of the company and chief
executive Richard Rosenblatt in particular of hiding vital
financial information about MySpace parent Intermix Media's
performance in order to convince the shareholders that $580 million
was a fair price for the business.
“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,” Greenspan said. “It is time everyone knew the
truth about the ‘hijacking' of Myspace and the individuals
responsible for this eye popping theft.”
Greenspan says that executives believed at the time that the
company could be worth $20 billion but did not disclose this to
shareholders.
Last February Greenspan filed a complaint against Intermix and
VantagePoint Venture Partners in the Superior Court of California
County of Los Angeles. In that complaint he claims that News
Corporation bought Intermix as a result of an unfair process and at
an unfair price that did not reflect the value of the business.
Another shareholder lawsuit has recently been filed in Federal
Court in relation to the deal, said Greenspan's statement.
"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," a News
Corporation spokeswoman told Reuters news agency. "We've
strategically built this business since the acquisition and are
just now beginning to realise real financial value. This is simply
a case of sour grapes making for loud complaints."
Greenspan said that he found internal company reports which said
that MySpace revenue grew at a rate of 1,289% a year between 2003
and 2005. The growth of the whole of the company, which included
other units, was 52%, which is the figure which most shareholders
were given, says Greenspan.
Greenspan made $47 million from the sale of the company, which
he left in 2003 amid an informal SEC inquiry and restatements of
accounts, according to Reuters.
