CNET reports that Brad Greenspan, the founder of Intermix Media (MySpace) which was sold to News Corp for $580 million last year, is seeking a federal investigation into the sale. He claims that Intermix shareholders were defrauded by almost $20 billion. Greenspan accuses a former Intermix CEO of hiding the real growth data from the shareholders “to present a distorted financial picture and execute a deal quickly.”
According to Greenspan, “He [Intermix CEO] knew it was worth billions of dollars, he was able to pass it off to News Corp to get a sweetheart deal for himself.”
Greenspan claims that according to internal company reports, MySpace revenue grew 1,289 percent annually from December 2003 through June 2005.
After Yahoo made a $1 billion offer to acquire Facebook, a popular student-oriented social network, it became apparent that the sale of MySpace for $580 million was a huge mistake. Analysts are estimating the value of MySpace at somewhere around $20 billion.