Oh no you don't!
The founders of Skype have filed a lawsuit aimed at disrupting eBay's (EBAY) impending $1.9 billion sale of the internet communications company to a consortium of investors including prominent venture capitalists. The lawsuit names eBay, Silver Lake Partners, and Andreessen Horowitz, the investment firm of Marc Andreessen, the billionaire co-founder of Netscape, among other defendants.
Janus Friis and Niklas Zennstrom -- both billionaires in their own right -- filed the suit Wednesday, through their company, Joltid Ltd., in the U.S. District Court for Northern California. They are seeking an injunction against Skype, which they founded but later sold to eBay, as well as statutory damages they claim are accruing at an eye-popping rate of "more than $75 million daily" -- or nearly $1000 per second.
And it gets nastier: the only named defendant in the suit is Mike Volpi, the former Chairman and CEO of Joost, the online video start-up that Zennstrom and Friis founded. The pair booted Volpi out the door last week after Volpi had stepped down as CEO earlier this summer and joined Index Ventures in an apparently botched attempt to win over the Skype founders. That move appears to have backfired and badly, because as Staci Kramer notes, "now they're suing him."
EBay shares were trading down nearly 2 percent in after-hours activity late Wednesday on word of the lawsuit.
Zennstrom and Friis had maintained a copyright claim to Skype's peer-to-peer calling technology even after they sold the company to eBay in 2005. The pair terminated a license for the technology in March, and the two companies are currently squaring off in litigation in the United Kingdom -- a matter which is expected to go to trial next year.
Now the battle has been joined stateside, two weeks after eBay announced that a private consortium led by Silver Lake would pay $1.9 billion in cash for Skype, which eBay expects to earn revenue of $600 million this year. The giant online auctioneer would retain a 35 percent equity investment in Skype, and had said it wanted the deal, which values the company at $2.75 billion, to close before the end of the year.
Not so fast, say Zennstrom and Friis, setting the table for a legal showdown over the nearly $2 billion transaction. Joltid claims damages arising from eBay's copyright violations are building up at a whopping $75 million per day.
That's over $50,000 per minute -- or almost $1000 per second.
Along with Silver Lake Partners and Andreessen Horowitz, the lawsuit names Index Ventures and the Canada Pension Plan Investment Board as defendants.
Marc Andreessen did not immediately respond to a request for comment on the lawsuit, and a spokesperson for Silver Lake declined to comment to DailyFinance.
John Pluhowski, an eBay spokesman, told The New York Times that the suit's allegations "are without merit and are founded on fundamental legal and factual errors," adding, "We remain on track to close the transaction in the fourth quarter of 2009."
What are Penny Stocks
The lucrative and dangerous world of penny stocks.View Course »