M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Wednesday, June 16, 2010

Selling the Company to Save It

The typical argument that one hears from managers seeking to beat back a hostile acquirer is that corporate culture is important to generating shareholder value and only by remaining independent can managers assure preservation of that culture.  The experience of Zappos is a twist on that.  (What's Zappos?  Believe me if your students are using their laptops in class, I guarantee you at least one of them has made a shoe purchase at Zappos while you drone on about fiduciary duty this, fiduciary duty that...)  In any event, Tony Hieh, CEO of Zappos, shares his story in the current issue of INC Magazine in the story Why I Sold Zappos.  Under pressure from his VC backers to go public and change the corporate culture in ways that Hsieh felt would be bad for business, Hsieh sought refuge in a sale to Amazon.   It's an interesting peek into the boardroom of a successful start-up and worth taking a look at.



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