William Brown, who was the company’s chief executive in 2018, is entitled to damages after Matterport prevented him from selling all his shares when the company floated in 2021.
exist Inman Connect Las Vegas, July 30-August. On January 1, 2024, the noise and misinformation will be cut away, all your big questions will be answered, and new business opportunities will be revealed. join us.
Former Matterport CEO Bill Brown is entitled to recover $79 million from the company he once led, according to a new ruling in a Delaware court.
Vice Chancellor Lori W. Will previously ruled that Matterport improperly restricted Brown from selling his stake in the company shortly after the company went public in 2021. Higher cases charge funds to Matterport.
Participate in the May INMAN Intel Index Survey
The comments come at a sensitive time for Matterport, which is Acquired by CoStar in a $1.6 billion deal. Neither company made any comment after announcing the impending sale, which is expected to take three to nine months to complete, depending on regulatory review.
According to the opinion, Brown argued that he was entitled to $141 million in compensation based on Matterport’s historically high stock price. Weir disputed that argument and said she was paid $79 million based on the timing of Brown’s potential sale of his stake in Matterport after it became a company. listed company 2021.
Weir also said Brown was not entitled to higher damages because there were essentially no wrongdoers in the case. The issue stems from Matterport’s pre-IPO charter, which was designed to restrict shareholders from selling their shares within six months so the company could stabilize after listing.
Brown first challenged the bylaws, which were put in place after he had said he wanted to sell his stake, in a lawsuit filed in 2022.
“He argued that his shares were excluded from the blackout,” Will wrote in her opinion. “He’s right.”
Brown sold all of his shares for $80.4 million. Including damages from the lawsuit, Brown earned $159.5 million, plus interest, from Matterport’s decision to go public.
Neither CoStar nor Matterport immediately responded to requests for comment on whether the opinion would have an impact on the sale. Those losses amount to nearly 5 percent of the price CoStar agreed to pay for Matterport, a price some financial analysts say is too high.
“CoStar paid more than we expected (roughly 9x 2024 revenue and roughly 20x non-GAAP gross profit),” analysts at William Blair & Co. wrote last month. “This could weigh on near-term profits, and may raise some antitrust concerns (CoStar appears to be obligated to litigate).”
Matterport said in a filing with the Securities and Exchange Commission that it expects to appeal the ruling in the future.
Email Tyler Anderson
