Investor suggests to spin-off PayPal from eBay

eBay Inc. investor Carl Icahn has proposed to spin-off eBay’s payment platform PayPal as a standalone service.

Icahn who currently has a 0.82% stake in the company proposed the idea after evaluating eBay's figures for Q4 2013, showing $850 million in earnings, a 14% jump from the year prior. Icahn also has appointed 2 board members to eBay’s board of directors after upping his stake in the company earlier this month.

Icahn states his main reason for suggesting the spin-off results from PayPal’s relatively fast growth in comparison to eBay’s more modest advancements, explaining eBay is holding PayPal back from its true potential. eBay was quick to responds to its investor’s suggestion, replying that eBay and PayPal are too intertwined to be separated from one another.

“Regarding Mr. Icahn's separation proposal, eBay's Board of Directors routinely assesses the company's strategic direction and has explored in depth a spin-off or separation of PayPal. eBay's Board of Directors has concluded that the company and its shareholders are best served by the current strategic direction of the company and does not believe that breaking up the company is the best way to maximize shareholder value. As part of eBay Inc., PayPal is able to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term the company's technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide. Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term at global scale, creating value for consumers, merchants and shareholders,” mentioned a statement from eBay regarding Icahn’s suggestion.

PayPal and eBay are not the only companies trying to fend off corporate interference from Icahn. The investor, in the last 2 weeks has completed a $500 million investment in Apple Inc. and has appointed 2 board members there as well. His recent investment positions Icahn with a $3 billion stake in Apple.

Some speculate Icahn’s spin-off suggestion was the result of PayPal competitor Stripe being valued at $1.75 billion recently.

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