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Corporate Law Activity Feedback


Master in Decision Making And Innovation

Hi Gaians!

Now that we have assessed the activity you have completed for Corporate Law unit, it’s time to give you some feedback and help you to find out the success and failures on your resolution of the given case. “eBay vs Craigslist”

The specific objectives of this case are that the students be able to:

  1. Explain the rights and duties of both majority and minority shareholders in

a corporate setting.

  1. Analyze the ethical issues involved in using a poison pill strategy by a

majority shareholder.

  1. Analyze the ethical issues involved in accepting an investment from a

competitor organization. (Personal opinion)

We had a total of 277 students answering this activity  which has three questions that were supposed to be properly justified based on the concepts you have learned from the ebook and on the information provided in the case, the Introductory video from expert Angela Arana and the webinar where the main concepts have been clarified.


Most of our students tried to argue and support each of choices they have made between the YES and NO…However, there were cases where they did not manage to provide an accurate reasoning based on the information from the case and ebook.

Keep reading and you will find our case resolution based on the following Assessment Criteria we have shared with you on the Activity section:

For question 1

  •       You should identify the 3 Fiduciary duties supporting your answers with the eBook and extra complementary information.
  •       You should be able to explain whether the fiduciary duties were violated or not

For question 2

  •       You should also apply what you have learnt from the last chapter of the ebook and last part of the introductory video
  •       You should be able to reflect about when should the poison pill be applied and make a thoughtful analysis considering if the measure used by Buckmaster and Newmark was ethical from its position of shareholders Majority and directors of the corporation.

For question 3

  •       You should be able to apply what you have learnt from the ebook and extra links provided, showing critical skills and reflecting on whether the participation of Buchmaster and Newmarks in the sale of the shares of Knowltons to ebay was ethical or not.
  •       You should justify your position not matter what your consideration may be.




I have also count on the expert Angela Arana in order to structure and adequate the answer to the questions you have faced so as to help you understand where you have done it right  and where there is place for improvement. Notice the way each position is justified!

Case Background

On June 29, 2007, eBay launched the online classifieds site in the United States. eBay designed Kijiji to compete with, the most widely used online classifieds site in the United States. Interestingly enough, at the time of the Kijiji launch, eBay was a minority owner of craigslist with a 28.4 percent stake. eBay’s decision to compete with craigslist triggered certain defensive measures previously taken by craigslist, and eBay sued to reverse those measures.

  1. Did Buckmaster and Newmark violate their duties as directors and as majority shareholders? Why or why not?

As we’ve reviewed on the eBook, directors owe special duties to the corporation and particularly to its shareholders.

In this case, Buckmaster and Newmark failed in the safeguard of the corporation by breaking the following main duties: the duty of care, the duty of loyalty and the duty of disclosure. The duty of care states that directors and controlling stockholders must inform themselves of all relevant information and act with care in the best interest of the corporation.

The duty of loyalty requires the directors and controlling stockholders act in good faith and put the interests of the corporation above their own personal interests.  The duty of disclosure consists of provide reasonably complete disclosure to shareholders in two cases: when shareholders are asked to vote, and when the company completes a conflict of interest transaction.

In this case, Buckmaster and Newmark cannot be said to be disinterested directors. Buckmaster and Newmark stood in the dual roles of shareholder and directors, and in addition, as the dilutive issuance had the effect of increasing their shares, they both stood to receive personal gain.

As interested directors, Buckmaster and Newmark must prove that the transaction was effectuated at a fair price and was the product of fair dealing. Even if we can say that the issuance has been effectuated at a fair price, it would not appear to be the product of fair dealing.

The issuance increased both Buckmaster and Newmark’s individual shares without increasing the shares of eBay in the same proportion, thus diluting eBay’s shares. The issuance has diluted eBay’s shares to 24.9 percent, which was (likely not coincidentally) just shy of the 25 percent eBay would mathematically need to elect a board member through cumulative voting.

The staggered board amendment had already been put in place to prevent eBay from electing a board member, and the dilutive issuance effectively ensured that eBay would never be able to elect a director to the Board. Moreover, Buckmaster and Newmark signed the agreement authorizing the issuance unilaterally, in their capacity as directors: by Buckmaster as CEO on behalf of craigslist, Inc. and by Buckmaster and Newmark as individual shareholders; all without informing eBay.

These actions can hardly be deemed to be the product of “fair dealing” and thus, it is likely that Buckmaster and Newmark did, in fact, breach their fiduciary duties as majority shareholders.

  1. Was Buckmaster and Newmark’s use of a poison pill ethical in light of the fact that they were majority shareholders? Why or why not?

Buckmaster and Newmark’s use of the poison pill was unethical. As we’ve discussed on the eBook and the webinar, the poison pills are typically used for the purpose of thwarting a hostile takeover attempt. Although eBay made it clear that they eventually wanted to acquire all of craigslist, they acknowledged that they would take steps do so only when Buckmaster and Newmark were ready.

They made no formal offer to buy Buckmaster and Newmark’s shares, tender or otherwise, and there was no other indication that a hostile takeover was imminent. Craigslist’s actions in implementing hostile takeover defense measures might therefore be seen as unwarranted and unethical.

Since there was no imminent takeover, it seems the only purpose in deploying the poison pill was to force eBay to sell their shares so that the parties could part ways. Buckmaster and Newmark were majority shareholders and therefore in a stronger position from a voting perspective than eBay. In light of this position as majority shareholders, Buckmaster and Newmark owed eBay the duties of care and loyalty.

The argument can be made that Buckmaster and Newmark breached these duties by taking actions that essentially rendered eBay powerless as minority interest owner of Craigslist.

The breach of these fiduciary duties would be considered a violation of Craigslist’s moral obligation to protect eBay’s legal rights as a minority shareholder.

  1. Based on the knowledge that you have acquired in the eBook. Was Buckmaster and Newmark’s participation in the sale of Knowlton’s shares to eBay unethical? Why or why not? Draw a personal conclusion about it. (Opinion-based question)


Buckmaster and Newmark’s acceptance of eBay’s investment could be considered unethical. It is clear that Buckmaster and Newmark were aware of the differences in philosophy between Craigslist and eBay. They were admittedly suspicious of eBay’s motives, and yet took the investment in spite of their concerns. This could lead to a conclusion that Buckmaster and Newmark essentially used eBay to get rid of a problematic shareholder (Knowlton) and in the process gain $8 million each.

Viewed through the lens of Kantian ethics, Buckmaster and Newmark used eBay as simply a means to an end (eliminating Knowlton), rather than respecting them as a beneficial new shareholder and appreciating the value they could potentially bring to the company.

On the other hand, you can also see the transaction as simply a savvy business move. Buckmaster and Newmark’s actions can be considered ethical. Utilitarianism states that ethical decisions are those when, considered against other alternatives, provide the greatest amount of good to the greatest number of people. Acceptance of the investment from eBay was seemingly a win-win for all parties.

Buckmaster and Newmark profited to the tune of $8 million each and were able to get rid of a disgruntled shareholder, Knowlton was able to gain $16 million and leave a company whose vision he no longer shared and eBay was able to become a nearly one-third owner of the most successful online classifieds company at the time. Furthermore, millions of Craigslist users stood to benefit, as entering into a relationship with a technically-experienced company such as eBay could potentially result in an improved website experience that would still remain ad-free. The decision, therefore, can be said to have produced the greatest amount of good for the greatest number of all parties involved.

It has been a pleasure to work with you and try to enhance your knowledge about such important  subjects!

Alienys Duarte

Academic Tutor

Hyperloop Networks That Could Transform EU Commerce

The Hyperloop One Global Challenge unleashed a remarkable variety of uses for fast, clean and direct Hyperloop technology. This is European innovation on a regional scale.

Hyperloop Spain-Morocco

Transportation engineers have always dreamed of spanning the nine-mile wide Strait of Gibraltar with a fixed link. Some have proposed floating bridges, like the kind Xerxes lashed together with boats in 480 B.C. to cross the Hellespont to invade Greece. Others have suggested more conventional approaches such as tunneling under the sea bed. A third option is the most daring, as it has never been tried before, which is to suspend a floating Hyperloop tube 25-50 meters underwater!!  The tube would be anchored by cables to the sea floor or to sturdy buoys on the surface. Within a few minutes, passengers or cargo could leap this ancient trade gap between Africa and Europe.

A floating Gibraltar tunnel may sound like a radical idea, but it’s part of an otherwise pragmatic Hyperloop One Global Challenge proposal from the Hyperloop Spain-Morocco team. Their idea, showcased in early June at our Vision for Europe event in Amsterdam, earned its way into the semifinalist round in the Global Challenge with a high-speed route from Madrid to Morocco, crossing under the Strait of Gibraltar. A truck-plus-ferry takes 6.5 hours. A flight takes five hours. With a Hyperloop, the journey would be only 50 minutes.


Building a 21st century link across El Estrecho would leave a lasting impact on global commerce. “We are not talking about two cities, we are talking about two continents — that’s global,” says Carmen Palomino Pérez, Team Advisor and Director of Talent at the Fundación Universidad-Empresa. One-third of the 100,000 ships that pass through the Strait run north-south between Spain and Morocco, and the cargo terminals on either side are booming. Good for the economy, at the expense of congestion, emissions and road accidents.

The Spanish port of Algeciras has been one of Europe’s fastest-growing ports for decades, and is now a member of Europe’s 100-million metric-ton club. The Moroccan port of Tangier-Med, Africa’s second largest by volume, is expanding to accommodate another 5-million twenty foot equivalent units (TEU) a year, doubling its capacity by 2019. Renault’s automobile factory in northern Morocco is a major exporter from Tangier-Med, producing 229,000 cars a year with capacity to produce 50% more vehicles if needed.

A Hyperloop could offer clean and continuous capacity for all that growth. Spain has experience building big transit and infrastructure. It’s a competitive advantage among EU countries. Twenty-five years ago people in Spain embarked on an ambitious high-speed rail investment program. This could be one of the sectors where they  can continue to lead over the next 25 years.

Hyperloop Spain would link three of Southern Europe’s most strategic cargo nodes into a multimodal super-corridor. The five to six million passengers crossing on ferries every year (and roughly two million air travelers) would cut their journey times by up to 80%. There will be heavy demand to shift from ferries to Hyperloop if it gets built. The Eurostar within 3 years had captured 70% of the passenger traffic between Paris and London.


The bigger picture is in freight. A container offloaded in Morocco’s sprawling port of Tangier-Med could be at an air cargo center outside Madrid In less than one hour. Today, it takes four to six days to move a container by train and ferry from Tangier to Madrid.

The biggest question mark in the proposal is the tunnel under the Strait. A conventional subsea tunnel excavated by giant boring machines is a known quantity, but could take a decade to complete. A submerged floating tube, also called an Archimedes Bridge, could be deployed far more quickly if approved, and it would be straighter and faster for Hyperloop transport. We’ve written about them before. They’re slightly flexible, well-sealed tubes stabilized with surface pontoons or cable stays to the sea floor. Their depth takes advantage of the hydrostatic effect between 25 and 60 meters with the least turbulence, and it’s down far enough to allow shipping and wildlife to pass. On land, acquisition of the rights-of-way can get complex but Spain and Morocco have similar policies regarding expropriation and the negotiation process is nearly automatic once it’s decided that the state will buy the land from the existing owners.

Even without the Gibraltar crossing, the domestic portion of the Hyperloop Spain-Morocco route would yield serious economic and environmental benefits. The Mediterranean port of Algeciras, Spain’s largest by volume, lacks a robust and reliable domestic freight link north to Madrid and greater Europe beyond. Everything goes north by truck, adding to congestion, pollution, and accidents. A Hyperloop link could transform Algeciras from a port focused almost entirely on transshipment today. More than 90% of arriving containers go right back onto another ship. A high-speed, emission-free and continuously operating Hyperloop running north to Madrid could convert Algeciras into an import hub, increasing productivity in Spain’s economy and adding a deep-water import hub to the smaller ports of Barcelona and Valencia.

The European Commission has identified the Europe-Africa corridor as one of strategic interest. Trade through the Strait of Gibraltar impacts the lives of 2 billion people. This proposal, which received the endorsement of both governments and private sector players such as Acciona and Fundación Universidad-Empresa, deserves watching.


Personal Branding- Digital Capacities activity

Master in Decision Making and Innovation

Hi Gaians!

Now that the deadline of the Personal Branding activity has passed, it’s time to give you some feedback regarding this activity, so you will be able to find out how you should have completed it and what aspects should have taken into account in your analysis.

Throughout this activity, we wanted you to understand the development over time of an enduring personal brand, to evaluate the flexibility of a personal brand- how many different categories the brand can occupy yet still retain authenticity and to explore the importance of timing in extending or transitioning a brand.

These teaching objectives should have been achieved through two parts: In the first part you should have answered five reflective questions about the Oprah Winfrey’s story and in the second part you should have filled out the canvas model provided, completing the Personal Brand Culture analysis from the point of view of two different profiles based on her target market.

The first five questions had the objectives that you searched for information about the Oprah Winfrey’s story, reflected on it and analysed how her brand has transitioned into new categories as a strategy for sustainability and competitive proofing. In this part, the students should have identified how Oprah Winfrey’s brand has broken barriers for a Black American woman, detailing some of her brand values (transparency, self-esteem, perseverance, self-improvement, determination, leadership, positivism…) and how she has focused on the defence of black community rights transitioning into her fight against poverty and protection of children’s rights.

We also wanted in this part that the students mentioned some relevant facts about Oprah Winfrey’s story that enabled her to evolve and reinvent herself, such as her talk show role, her role as an actress in the Steven Spielberg’s film, producer, the creation of Oprah’s Angel Network, the foundation of the Oprah’s Leadership Academy for Girls in South Africa, her support for Barack Obama’s presidential campaign, the creation of her own channel and so on. These details and facts are a good indication for us that the students have done good research and have been able to identify the most important facts of Oprah’s life that have allowed her brand extension.

The students should also have reflected on how well her brand story has transformed through her career by mentioning how her decisions have helped her to expand her brand in gradual steps and connect with more people every time. At this point, we wanted the students to have talked about how she can extend her brand (e.g. enhancing younger generations) and have identified some stages of her life where she has extended her brand and the students explained why these changes made sense. For instance, when the decision of creating the Oprah’s Leadership Academy for Girls, which was in line with her values, identity and story, made sense because she managed to connect with her audience and make her brand stronger in a moment when people wanted to see more about Oprah.

Therefore, at the beginning of the the activity the students should be able to define the different categories that Oprah’s brand has occupied in her story and conclude how her brand has been able to evolve gradually at the correct moments, connecting with more people, always being in line with her values and her “unique selling point”. Transitioning a brand in gradual steps is likely to be more successful than leaping from one radical reinvention to another, at least in terms of bringing along an existing audience while trying to cultivate a new one. This is what Oprah was able to do!

Once the students have analyzed the Oprah Winfrey story and the main facts that have characterized her life, the students had all the information to identify the success factors that have typically been tied to one or more of the several categories Oprah’s brand occupies, including television, media producer, actress and so on. At this point, the student could have mentioned the Oprah’s role as:

  • An empowered black woman.
  • Her ability to break barriers as a Black American woman.
  • Her adaptability as a career woman (moving from former host to chairwoman and CEO of Harpo Productions, for example)
  • Her ability to connect with various audiences.
  • Her drive and discipline (hard-working, self-confidence, self-improvement,
  • Empathy.
  • Learn from failures.
  • Her courage (perseverance, self-esteem, positivism…)
  • Communication and leadership skills.
  • Humility, transparency and honesty.
  • Collaborative spirit and charity.


Regarding the risk in personal branding, the students should have raised the positive and negative aspects of connecting the person to a brand, for instance:


Therefore, you need to have a clear idea of who you are, what you do, what you want to become, so your message should be perceived correctly for your target audience.

At the point of the personal brand culture analysis, we wanted our students to identify the brand elements that have broader appeal beyond any single demographic group.

During this exercise, some students have described Oprah Winfrey as courageous, strong, positive, fearless, friendly and talkative  (“Who is she”); as a celebrity, an actress, TV presenter and a breaker of barriers (“What is she”); as someone to emulate, a role model or someone women felt they could become (“ What do you think or feel about her”); and as someone motivational or who feels like a close friend (“What kind of Relationship do you have with her”).

As you could have seen, all these characteristics are correct and in line with what she wants to transmit and communicate about herself, showing clarity, constancy and coherence.  

But, what made the Oprah Winfrey’s story meaningful? In this question, most of the students mentioned that although she faced difficult situations from childhood, she was able to overcome them and become what she is now.

Her ability to overcome adversity turned her into a role model for many kinds of women (diverse in race, background and body type). This fact has also helped her to establish strong emotional connectivity with her audience and has given authenticity and credibility that reinforces the strength of her brand.

Considering all the information that we have collected about Oprah’s life, finally the students should have identified some of the brand essence components, which are universal aspects of Oprah’s brand. At this point, they should have talked about her persistence, drive, high self- esteem, hard working, courage, generosity and empathy, for instance.

With this last point we have done a complete analysis of Oprah’s life and we have seen how her brand has extended into different categories showing clarity, consistency and coherence with her values. We have also seen how transitioning a brand in gradual steps is likely to be more successful than leaping from one radical invention to another.

In the Oprah Winfrey case, she has managed to develop her brand over time maintaining authenticity, which is an essential component in personal branding.

I hope this feedback has shown you what we expected from you in this activity.

Johanna Arias

Academic Tutor



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