InnerWorkings Sues Yahoo in Illinois Court Over Defamation
InnerWorkings Inc. (INWK) sued Yahoo! Inc. claiming the search-engine provider erroneously undervalued its earnings, depressing the stock price.
Yahoo’s finance website has said since March that InnerWorkings’ earnings before interest, taxes, depreciation and amortization, or Ebitda, for the past 12 months is $20.9 million, or about $5 million less than the actual amount, InnerWorkings said in the lawsuit filed today in Illinois state court in Chicago.
The error results in an unfavorable “enterprise value to Ebitda ratio,” according to the complaint. Yahoo, based in Sunnyvale, California, arrives at that figure by dividing the market value by the Ebitda, while factoring in debt, minority interests and other variables, InnerWorkings said.
“The Yahoo! finance posting of this Ebitda information on InnerWorkings Inc. is a false and defamatory statement” that resulted in the shares being undervalued, according to the complaint.
InnerWorkings, which manages print and promotional products for companies, fell 5 cents to $8.61 in Nasdaq Stock Market trading. The shares have climbed 31 percent this year, valuing the Chicago-based company at $397.8 million.
Dana Lengkeek, a spokeswoman for Yahoo, didn’t immediately return a call seeking comment.
The case is InnerWorkings v. Yahoo, 2011L006923, Illinois County Department, Circuit of Cook County (Chicago).
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