Brad Greenspan miffed over thwarted attempts to acquire Stage6
MySpace cofounder suggest that DivX's board of directors didn't do right by shareholders by not at least considering his $11 million bid.
Brad Greenspan, the highly unpredictable MySpace cofounder, continues to go after distressed Web video sites.
Fresh from acquiring DivX. The problem is that the DivX board never responded to his offer before simply shutting down Stage6. Greenspan's miffed., Greenspan said in a press release on Friday that he recently made an $11 million bid to acquire video-sharing site Stage6, operated by
"After LiveUniverse makes its first offer, DivX Board refuses to engage in any direct dialogue with LiveUniverse for over 5 days," according to the release issued by Greenspan's company Live Universe. "During this time, DivX shuts down Stage6...Directors of public companies have a fiduciary duty to shareholders to try to get the best deal and represent their interests, first and foremost."
LiveUniverse, an online network of entertainment sites, said in the statement that DivX continues to rebuff its offers and has yet to state publicly why it's better to shut down the site, which it did last week, rather than accept LiveUniverse's bid.
That bid, which includes $3 million in cash and $5 million in online advertising, is still on the table, according to the announcement. Los Angeles-based LiveUniverse said that if DivX would agree to the terms, it pledged to close the transaction within 72 hours.
Taking the issue public is obviously an attempt to embarrass DivX's board into negotiating. But Greenspan's accusations do highlight some curious decisions made by DivX's administration.
TechCrunch cited unnamed sources last week who said that DivX was recently preparing to spin off Stage6 and had amassed about $24 million in venture funding but "a ridiculous battle of egos at the DivX board level caused most of the team to simply quit."
DivX, a publicly held company that creates and licenses digital-video technologies, said that it closed Stage6 because of cost concerns. Techcrunch reported that the company was paying about $1 million per month for bandwidth. Stage6 offered users the ability to upload high quality video to the Web.
A DivX representative said executives could not comment but would make a statement about their Stage6 decision on Tuesday, when they reports quarterly earnings.