In 1998, eBay hired Goldman Sachs to underwrite the initial public offering (IPO) of eBay stock. In doing so, Goldman Sachs allocated shares of the eBay IPO stock to eBay “insiders,” including members of eBay’s board of directors. Goldman Sachs's purpose in making the allocations was allegedly to increase the likelihood that eBay would hire Goldman Sachs again by bribing the recipients with the valuable IPO shares. This practice of allocating valuable IPO shares to favored clients was known as "spinning." Three of the directors on eBay's seven-member board received the IPO allocations and sold the shares on the open market for a significant profit. Shareholders of eBay (plaintiffs) brought derivative actions against the directors (defendants). The shareholders alleged that the directors’ acceptance of the private allocations of the valuable IPO stock violated their fiduciary duty to eBay by usurping eBay’s corporate opportunity, because eBay could and would have purchased the stock that was allocated. The plaintiffs alleged that Goldman Sachs aided and abetted the directors in their breach of their fiduciary duty. It is undisputed that eBay could afford the stock financially, that it was in the business of investing in securities, and that eBay was never given an opportunity to turn down the allocations. The directors filed a motion to dismiss for failure to state a claim and for failure to make the necessary pre-suit demand on eBay's board of directors. The shareholders claimed that demand was excused as futile because three of the directors participated in the spinning, and the remaining four directors had close personal and professional ties to the involved directors and received eBay stock options that provided a significant financial incentive for them to retain their positions on the board.