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Comment by fidanov | Hacker News Reader

Not a fan of Instagram, and I think FB purchase was stupid, but still, it is a private dealing between two companies. Even if there were thousands other offers, they can choose the one that they prefer. Moreover, it's not only money, when choosing such an offer.

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The board and executives work for the shareholders. They are required to maximize shareholder value, and taking a lower offer for personal gain is illegal. That is the concern here.

That said, it's hard to have sympathy for investors in a company that flipped for $750M in under two years.

I have a problem with your second statement. Why is it hard for you?? Why does the timing have anything to do? If anything, apploud to Mr. Systrom for building a service that attracted millions in such a short period of time. Every one of us trying to build a startup would love to have the same exit.

I'm not sure you read me right.

I think the investors would have a lot of difficulty establishing that they got a raw deal here given the incredible rate of return.

Instagram's investors have partial ownership of the company and presumably that comes with voting rights. If the founders hid other offers and presented only Facebook's offer to the investors because Facebook secretly offered more personal gain to the founders, then that would be fraud. The founders would be deceiving and effectively stealing from their own shareholders.

When a company recieves offers, the founders don't get to just pick and choose which offers they want to present to the board for a vote.

Agreed, if that is the case it is a fraud. If there was an official offer and they hide it, it is fraud. Every shareholder has the right to choose.

However, what I also meant is that in the article they talk only about the money side, there is no mention what else was on the table. For example, may be the strategy that Instagram is interested in is closer to that of Facebook than to the one of Twitter. Or maybe something completely different. We don't have the full picture.

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