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 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 at global scale, creating value for consumers, merchants and shareholders,” mentioned a statement from eBay regarding Icahn’s suggestion.
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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.