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Bible.com Investor Sues Company For Lack Of Profit

Posted by samzenpus on from the isn't-it-ironic dept.

The board of Bible.com claims that it is easier for a camel to pass through the eye of a needle, than to make money on the domain name, but an angry shareholder disagrees. From the article: "James Solakian filed the lawsuit in Delaware's Chancery Court against the board of Bible.com for breaching their duty by refusing to sell the site or run the company in a profitable way. The lawsuit cites a valuation done by a potential purchaser that estimated bible.com could be worth more than dictionary.com, which recently sold for more than $100 million."

17 of 181 comments (clear)

  1. There's an easy fix for this by lwsimon · · Score: 3, Insightful

    If the company is unprofitable, then buy up a majority of the stock and run it how you want - or sell your own stock and go do something else.

    No one is forcing investors to own this company.

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    1. Re:There's an easy fix for this by cgenman · · Score: 5, Insightful

      Supposedly, the "investor" was given his shares because of a $400,000 debt that the owners could not pay back. Further, the site hasn't been developed because this shareholder has been fighting with the board about control over the company. So I'm guessing he would like to buy up the majority of the stock, if it were possible. Though I doubt he could dump his shares for the 400k they cost him.

      Of course Bible.com is a bad business idea to begin with. Everyone has a bible, and there are basically billions of searchable bibles online. Religion tends to be face-to-face, or at least televised. Money in religion comes from donations, not advertising. And, of course, a domain name is not a business idea, it is a business asset. Without a real idea, there isn't a real business.

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    2. Re:There's an easy fix for this by lgw · · Score: 3, Insightful

      Actually, it's completely legit to establish in your documents of incorporation that profit is not your chief goal - you can put moral duties first, and the board would then have a fiduciary duty to those goals over profit. No one does, because it makes it hard to find any investors if you do that.

      Bible.com should really have done that, however, if thier intent all along was to focus on prophets over profits, and then the lawsuit wouldn't have merit.

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  2. who'd have thought.. by Custard+Horse · · Score: 5, Funny

    So, there is no prophet?

  3. For lack of ... prophet? by rekenner · · Score: 4, Funny

    FTFY.

  4. It's easy, actually by vadim_t · · Score: 5, Funny

    All you need to make a camel pass through a needle's eye is to grind it very finely.

  5. What are "Christian business principles", exactly? by Daniel+Dvorkin · · Score: 3, Insightful

    I don't think they teach "sell that thou hast, and give to the poor" to aspiring MBAs these days.

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  6. He should read his own website by x_IamSpartacus_x · · Score: 5, Insightful

    1 Corinthians 6:7
    Lawsuits among Christians are a no-no in the Bible.

    1. Re:He should read his own website by TriZz · · Score: 3, Funny

      I guess you RTFB?

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  7. Re:What are "Christian business principles", exact by AnonymousClown · · Score: 5, Insightful

    Chick-fil-a does it - they're not open on Sundays, treat their workers well, environmental stewardship, and other things that are branded "liberal" by the Fox News crowd and yet, they make boat loads of money doing things that others would think would eat into profitability and make one uncompetitive.

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  8. internet magic at work by Drakkenmensch · · Score: 4, Insightful

    Why would anyone agree to buy the domain name for 100 million dollars when there is no clear way of monetizing it or making it a profitable venture? It's so 1997 to think that the normal rules of business do not apply to the internet, because it's a magical place where there is profit for all and every 50$ investment yields a billion dollar return.

  9. As a matter of fact, you can by Anonymous Coward · · Score: 5, Insightful

    Legally companies do have responsibilities to their shareholders. That is exactly how the system is designed to work. Shareholders are entirely within their legal rights to sue their companies for failing to make decisions which are likely to make the company profitable.

    Maybe you think that on some sort of social level that isn't how it should work. To a lot of uneducated people, investing is paramount to gambling: you invest, you accept the risk, and then you win or lose, and that's it. But in the real world, investing is very different, and plenty of legal responsibility is heaped upon the board of directors to act in the investor's best financial interest.

    1. Re:As a matter of fact, you can by TheRaven64 · · Score: 5, Informative

      Not quite. Legally, the company is required to act in accordance with its charter. Typically, these say something like 'make as much money as possible by engaging in business X'. Sometimes they don't mention money at all, or in the case of companies that do the triple bottom line thing mention money as one of the objectives. When you invest in a company, you are saying that you agree with the company's mission.

      Simply not doing the thing that makes the most profit for the shareholders is never grounds for a successful lawsuit. If it were, then every company performing below the top few percent of the stock market would be legally obliged to liquidate its assets and invest them all in one of the top companies.

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    2. Re:As a matter of fact, you can by bberens · · Score: 3, Insightful

      The Board is required to fulfill the company's purpose as laid out in the corporate charter. That may or may not be maximizing profits.

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    3. Re:As a matter of fact, you can by Americano · · Score: 3, Insightful

      As a company, If the company isn't returning as much profit as possible THAT QUARTER, you aren't fulfilling the obligations to the shareholder.

      Not true, at least not as stated. There's no obligation to provide "maximum profit" in a specific quarter, or in every quarter.

      Corporations can, and often do, take a longer view of profitability, and focus on making wise investments (expenditures!) today that will enhance their profitability later through increased capacity, a better market position, acquisition of a key strategic component, etc.

      Corporations that are solely concerned with the current quarter are foolishly shortsighted - so much so that I think you could probably make a good case for that sort of governance being a breach of fiduciary obligations to shareholders.

    4. Re:As a matter of fact, you can by Americano · · Score: 3, Insightful

      As he wrote it, he's probably quite correct - I think it's probably quite likely that no corporate charter has listed its sole business goal as "making truckloads of cash."

  10. Re:What are "Christian business principles", exact by MaWeiTao · · Score: 5, Insightful

    It's not "liberal" when an individual or corporation decides to do these things. It's considered "liberal" when the government forces individuals to do these things, or extracts money from individuals and corporations in order to do these things themselves.

    Many conservatives participate in a lot of charity, I'm not sure why you consider those two things to be mutually exclusive.