Computers/Electronics
Ubiquiti Networks CEO reportedly faces expensive decision on NBA franchise
Published: Nov. 30, 2017 at 5:56 p.m. ET
Jeremy C. Owens
Ubiquiti Networks Inc. ubnt founder and Chief Executive Robert Pera must buy minority owners' stakes in the Memphis Grizzlies NBA franchise or sell his majority ownership, according to a Thursday report. The Athletic reported Thursday afternoon that minority owners Steve Kaplan and Daniel Straus had exercised a unique clause in their ownership agreement that allowed them to establish a new valuation for the franchise five years after it was purchased and demand that Pera buy their shares or sell his shares at that price. Pera and his minority investors paid $377 million for the Grizzlies in 2012, but NBA franchises have appreciated greatly since then - former Microsoft Corp. MSFT, +1.77% chief executive Steve Ballmer paid $2 billion for the Los Angeles Clippers in 2014 and the Houston Rockets sold to hotel and casino magnate Tilman Fertitta for $2.2 billion last summer. The Athletic did not reveal the price set by the minority owners. Most of Pera's wealth is tied up in Ubiquiti, as the chief executive owns 72.3% of the company, a stake worth $3.75 billion, according to FactSet. He has repeatedly promised investors that he will maintain a majority interest in the networking company, which was recently attacked by short seller Citron Research. Ubiquiti shares were unaffected Thursday afternoon, and have recovered from damage done after Citron's attack; the stock is up 15.6% this year, slightly trailing the S&P 500 index's SPX, +0.08% 17.6% advance.
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Jeremy Owens is MarketWatch's technology editor and San Francisco bureau chief. You can follow him on Twitter @jowens510.