I doubt very much that the NEA board believes that the company is worth only $2.10 a share.
However, when a company with a stock trading at $1.50 receives a bid of $2.10, there is a certain amount of legal risk associated with rejecting the bid out of hand. The directors have a legal obligation to act in the "best interests" of the shareholders, and there is a risk that a court might judge that accepting a $0.60 premium is consistent with those best interests, and by rejecting the offer the directors may have failed in their feduciary duty.
From that perspective, their actions make sense.
On this occasion, I think that the board gets to have its cake and eat it too, because they know that their confidence in a much higher valuation is shared by the larger shareholders and that this proposal will almost certainly be voted down.
NEA Price at posting:
$2.10 Sentiment: Hold Disclosure: Held
