Zynga prevents company co-founder Tredel from selling some of its holdings

Source: Internet
Author: User
Keywords Co-founder
Tags blocking company exchange facebook market media media reports social

Absrtact: Beijing time May 5, according to foreign media reports, according to court documents, as a result of blocking the departure of the company co-founder, former executive Andiandro Tredel (Andrew Juno) in the U.S. unlisted Stock Exchange market SecondMarket Sale

Beijing time May 5, according to foreign media reports, according to court documents, as a result of blocking the departure of the company's co-founder, former executive Andiandro Tredel (Andrew Juno) in the U.S. unlisted Stock Exchange market SecondMarket sell some of the stake, Buyer Alpha investment--, an investment firm based in Abu Dhabi, has sued social gaming company Zynga to Delaware State Federal court.

Tredel is one of Zynga's founding team members, but he joined the company 9 months after Zynga was founded in August 2007. Tredel left last March to look for other opportunities and to spend more time with his family. After leaving the company, Tredel considered selling some of its own Zynga shares. Although Zynga has not yet listed, Tredel still has a chance to do so through the unlisted stock exchange market. But Zynga has rejected a deal to sell 1 million shares of Tredel to Alpha investment for unwarranted reasons. The total amount of the transaction involved amounted to 12.87 million dollars.

Jacob Pultman, an attorney for Alpha investment, said in the lawsuit, "Zynga has simply rejected the matter on trumped-up grounds." He said Zynga rejected the deal on technical grounds and his client did not understand why Zynga did not allow the deal to continue. In addition, Zynga has even questioned Tredel's role in the company. For years, Tredel has been called "one of Zynga's co-founder" by media reports, and he himself used this title on his personal resume. But now Zynga is considering Tredel is just a "former employee", even one of the original members of the Zynga team.

Zynga was founded in July 2007, and soon after the company successfully developed a series of social games, such as the Mafia War (Mafia Wars), farm-type games Farmville and so on. Tredel left last year on undisclosed grounds and is currently working for a venture capital company called Maveron in San Francisco. So far, Tredel has not publicly disclosed the reasons for his departure and has not commented on the lawsuit.

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Last summer, after leaving Zynga for some time, Tredel decided to sell some of its own Zynga shares. Then he came to secondmarket for a buyer. SecondMarket provides a platform to allow people to buy and sell shares of popular private companies. In general, the presence of secondmarket, such as the stock market of unlisted companies, is good for the founders of microblogging Twitter, social networking sites Facebook, and Zynga's popular companies, because it allows them

Postponed initial public offerings to focus on the company's long-term development.

But Tredel and Alpha investment quickly discovered that in trading Zynga shares, SecondMarket's trading system was almost controlled by a Zynga company. SecondMarket is not the plaintiff or defendant in the lawsuit, and SecondMarket spokesman Mark Melfi (Mark Murphy) has not been able to deal with the case and the company's relationship with Zynga. However, the spokesman said that, in general, SecondMarket would treat companies as their own clients, allowing them to establish criteria to determine who could or could not buy and sell stocks.

The lawsuit points out that Alpha investment representatives and Tredel met through SecondMarket last summer. By August last year they agreed to buy and sell 1 million of Zynga shares at a price of $12.87 per share. But Zynga's legal team immediately informed Tredel that Zynga had set up new guidelines not to allow him or any of its employees to sell shares in the company's 180 days after the initial public offering.

A Zynga spokesman argued that Tredel did not pass a lawyer to the company to submit a necessary legal opinion to prove that the sale of the shares was legal and submitted a motion to the court to remove the lawsuit. "shares traded on unlisted stock exchanges have added to the difficulty of law-abiding, especially the asymmetry between buyers and sellers," the spokesman said. ”

But Tredel and Alpha investment think Zynga's explanation is a bit far-fetched. Zynga raised 180 million of billions of dollars, some of which could be used to buy shares held by Zynga employees, as it struck deals with Russian internet investment company DST and several other investment agencies in 2009. Why can DST buy Zynga shares while Alpha investment cannot?

At the end of last year, it was reported that the Securities and Exchange Commission was conducting an investigation into equity deals for private social-networking companies such as Facebook, LinkedIn, Twitter and Zynga. The Securities and Exchange Commission has asked multiple participants in the four companies to submit information. The SEC's investigation into the stock trading of these private start-ups is likely due to the fact that once a company has more than 500 shareholders, it must disclose specific financial information, even if it is not listed.

Facebook has been trying to avoid breaking the limit by banning current employees from selling shares.

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