On2 shareholders sue to stop Google acquisition

On2 shareholders sue to stop Google acquisition

Summary: On2 Technologies, the video compression company acquired by Google last week, has been sued by shareholders looking for a better deal.According to an SEC filing (Techmeme), two class action suits were filed in Delaware and New York State.

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TOPICS: Banking
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On2 Technologies, the video compression company acquired by Google last week, has been sued by shareholders looking for a better deal.

According to an SEC filing (Techmeme), two class action suits were filed in Delaware and New York State. According to On2:

Both complaints generally allege, among other things, that the members of the Company's board of directors breached their fiduciary duties to the stockholders of the Company in connection with negotiating and entering into the previously disclosed merger agreement with Google Inc., and that Google and the Company aided and abetted in such alleged breaches of the directors' duties. Both complaints seek, among other things, declaratory and injunctive relief and the Delaware complaint also seeks damages in an unspecified amount. The Company believes that these claims are without merit and intends to vigorously contest such allegations.

The complaints focus on how On2 reported bottom line improvement soon after the Google deal was announced.

Also see: A look at On2 Technologies and why Google wants it

On2 reported a second quarter net loss of $224,000 compared to a loss of $7.2 million a year ago. Revenue in the second quarter was $5 million, up 53 percent from a year ago.

Matt Frost, interim CEO of On2, said the company "delivered our strongest revenue performance in six quarters." Shareholders are arguing that those results could have garnered a better deal for On2.

In early 2008, On2 traded above $1 a share. On2 sold for 60 cents a share.

Topic: Banking

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20 comments
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  • I smell M$ here

    Who is most interested in this deal not completing...M$!
    The price was more than fair, only some shareholders that were promissed more ca$h by M$ could have come with this frivolous lawsuit.
    Linux Geek
    • numbers are too small.

      Even if the price went from $.60 to $1.00 - the difference wouldn't be enough to make Google notice. MS wouldn't get involved unless they though it would hurt.

      I know you HATE Microsoft, but business sense should trumps emotion.
      Fark
  • RE: On2 shareholders sue to stop Google acquisition

    November 6, 2008 - 5:00 PM Eastern
    Third Quarter 2008 Results Conference Call

    On2 CEO : "We are not positioning ourselves to be bought out. There is a lot more value in On2 than currently reflected in our market cap. I can say with great assurance that is not what we are trying to do."
    GYA
  • More money

    They want it.
    Michael Alan Goff
  • RE: On2 shareholders sue to stop Google acquisition

    There is a lot more here than meets the eye. For months was always on top the short interest list. It endured waves and waves of bashers trying to keep the price down. Management worked under a cloak of silence. On the surface this looks like manipulation to screw the small investors.
    StevieD9325
  • Master Joe Says...

    Same song, differenc hrous. This is obviously going to continue to be an issue, every time companies get bought out. Sun shareholders sued Oracle, as did PeopleSoft, if I'm not mistaken? People needs to accept that, first off, the stock market is based on nothing but greed. No one invests in the stock market because they legitimately beleve in the company they are investing in. They invest in the stock market to make money. That's not always how it works out. People have lost very large amounts of money in the stock market before. Why, all of a sudden, is that something we canot allow? Why does the government have to offer tax breaks to those who lost substancial amounts of money in the stock market? And, more to the point here, why is it going to be that every time one company takes over another that the shareholders in the company being taken over sue, claiming they want more for their stake in the company? It is often said that you can't always get what you want. However, an addition should be made to that statement, in the form of "unless you cry and whine enough about it." The same is true for when you buy something, and choose to return it, even if it is against store policy. Either you have warn it, it has been a long time, sometimes a year or more, since you purchased it, or whatever. If you complain enough, you will almost always be given a refund, or, at least, store credit. The whole attitude that "nobody is a loser" needs to go away. Not a day goes by that life isn't unfair to SOMEONE, and people need to get over the fact that, sometimes, it's going to be unfair to them. If they don't like it, cry me a river.

    --Master Joe
    SteelCityPC
    • Walmart

      In response to your attitude, Walmart has a sign that says satisfaction guaranteed. If they don't want returns take the sign down and stop lying.
      blueskip
      • Master Joe Says...Again

        I'll make this quick. If someone buys an outfit, wears it out for an entire evening, leaves the tags on it, and then brings it back for a return the next day, would you think it was fair to give them th eir money back? Businesses aren't in the game to lose money, and that's what would happen there. You go to a store to BUY clothes, not take them out on a borrowed basis. Or, let's say someone buys a coat, wears it all winter, then wants to return it, claiming they never wore it, but the coat is in a clearly warn condition. Do you accept taht return? THAT is what I was referring to. Now you know, and knowing is half the battle.

        --Master Joe
        SteelCityPC
        • What if...

          ...You got a completely differently looking animal, wrong color, model, and type item than the one you paid for? I guess you call this "crying" too?
          eargasm
          • Master Joe Says...Yet Again

            Again, you AREN'T reading what I said. It's not about ALL returns being invalid. It is about people who take advantage of a good thing. A store accepts returns, as a courtesy to customers. fine, that's great. Some customers, however, such as the ones I gave in my EXAMPLES, being PERFECTLY CLEAR about it, take advantage of that courtesy, and use it to an advantage, that hurts the business. In this case, however, it is even more so true. If you are investing in the stock market, you are taking a risk. Sometimes, it pays off, and you make a little bit of money, or a lot of money. Sometimes, however, you make a bad investment decision, whether personally or guided by an "expert," and you lose money. As I stated, in my follow-up post, it is no different than gambling on a slot machine, or at a card game. If you play blackjack in Vegas, and think that the dealer is cheating, with no real proof, or way to prove it, you don't get to go to someone and say, "Excuse me, but I think the dealer is cheating, and I would like my $50,000 back." That person will look at you, and, before you know it, you will be laying on the sidewalk, feeling a rather sharp pain in your head, and a rather embarassed look on your face, while everyone around you is laughing. Or, to relate it even CLOSER, since I doubt you still get the point, what if you go to a slot machine, and put in $20. Then, throughout the time you play, you win and lose some, but end up with $10. You can'g go to the cash out counter and say, "Well, I put in $20, but it only gave me $10 back. Can I have another $10, so I don't lose any money?" That's the chance you take. The asme goes for this. You invested your money in the stock market, which is constantly in fluctuation. Sometimes, it goes up. Sometimes, it goes down. If it goes down, OR if the company you invested in gets bought out, you LOSE money. That's how the stock market WORKS. If EVERYONE who invested in the stock market made money, or was at least protected to the point where they didn't LSOE money, EVERYONE would invest in the stock market. But, that's not the way it is. NOW, do you get it?

            --Master Joe
            SteelCityPC
    • Rip us off, please.

      So, Master Joe thinks that if the company officers can make themselves rich by manipulating the stock prices, the investors should just shut up because life isn't supposed to be fair. Just cry him a river. You should feel lucky you were allowed to get screwed!
      Genghis Bob
      • Master Joe Says...Again

        Since you clearly missed the point the first time, allow me to give a better example. First, however, a short resposne to what you said. In the housing market, someone buying a home, for a long time, would offer to cut a deal with the seller. "Tell the bank I paid you a substancial amount more than what I did pay you, and I will give you half the extra money they give me for the loan." This was a way to get a quick cash injection, and to end up being able to pay the seller for the house, as well as get a nice bit of extra spending money right away. However, what happened in a lot of cases, and is, in large part, responsible for the current situation in the housing market, is the buyer would not be able to afford the loan. In many cases, this aws the fault of the bank, since common sense tells you that a person who picks strawberries in California, and earns $10,000 a year, cannot afford a $250,000 mortgage. Now, in this scenario, who do you think is wrong? To me, it's both. The buyer and seller were looking to get some extra cash, and the bank was thinking the higher the loan is for, the more they make in interest. Unfortunately, the bank is the one who got bailed out. That's not how it works in real life.

        Now, to respond to your comments about my "attitude." If you were to go to Vegas, and gamble at the casino, and lose $20,000, would you sue the casino because you feel like they ripped you off? I doubt you would get very far there. Gambling in the stock market is even worse. You are basically handing your money over to someone who is an "expert," and trusting THEM to gamble with your money. Sometimes, you make a substancial gain. Other times, like in the case this article discusses, you don't. If everyone always made money, everyone would invest. It just doesn't work that way. The same goes for playing the lottery, buying a raffle ticket, or any other form of gambling that someone participates in. The only difference in teh stock market is that you trust someone else's judgement, rather than your own. So, as far as I see it, if you invest in a company, and they get bought out, you made a bad investment. Just because you THINK you deserve more than what you are getting doesn't mean that you actually do. Had the company's stock suddenly jumped up $10 or so, no one would be complaining that they think they are getting too much money out of it. Am I right?

        --Master Joe
        SteelCityPC
  • Read Master Joe - he has it right

    Master Joe - You are right
    You said: 'The whole attitude that "nobody is a loser" needs to go away. '

    BTW: if you intend to invest $$$ - in the Stock market - be all right with the fact that
    you could loose all of it.
    Donald.Nagy
    • Sarcasm?

      Are yu being sarcastic? Cause I can't tell. If yu are then I wish to tell yu that everything in life has a risk, and investing in stock is not an exception. At least it's one of the risks that yu can choose to take.
      mathcreative
      • Master Joe Says...Again

        At least someone gets it. I chose to give a better example above, since those two clearly missed the point completely, in case you're interested. Either way, glad to know that common sense is somewhere to be found these days, and not totally gone. So, again, thanks for the response.

        --Master Joe
        SteelCityPC
  • RE: On2 shareholders sue to stop Google acquisition

    If you want to know why shareholders are outraged listen here:

    http://wayonda.com/index.php?page=videos&section=view&vid_id=100106
    GYA
  • RE: On2 shareholders sue to stop Google acquisition

    Come on give me a brake this is the stock market these things happen all the time if you don't want to lose any money Put your Money in the BANK Savings. don't cry because you lost some in the stock market...Boo Hoo now grow up!
    Jimmysr
  • RE: On2 shareholders sue to stop Google acquisition

    Are but surely if you are intentionally mislead that is a good reason to sue! If you own a piece of a car and your mate sells it for less than its worth you are entitled to kick his butt or get a the money that the car was really worth maybe :-)

    madhead9
  • RE: On2 shareholders sue to stop Google acquisition

    You'd bitch a blue fit if someone sold it off your back, like the naked short sellers and creators of the massive Fails to Deliver that On2 shareholders have had to endure. You sound like those free-marketers who are that way except when things don't go your way or you get caught doing underhanded or even illegal activities. Do you work for a hedge fund? Sounds like it.

    PS This was intended to reply to the rant-cant king, Master Joe.
    spixleatedlifeform
  • RE: On2 shareholders sue to stop Google acquisition

    There's no stopping us. GOOG is trying to legally steal OUR company. The first of just a few more salvos...

    http://www.prweb.com/releases/2009/11/prweb3231634.htm
    no2goog