eBay and PayPal split

Nancy Marshall-Genzer Sep 30, 2014
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eBay and PayPal split

Nancy Marshall-Genzer Sep 30, 2014
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What a difference eight months makes.  

Just last January, eBay President and CEO John Donahoe told analysts in a big conference call, “We and the board believe the best way to drive long-term shareholder value is to keep eBay and PayPal together.” 

But here’s what Donahoe said in a different statement Tuesday morning, announcing that eBay will spin off PayPal into a separate, publicly traded company: “However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges.”

So, what’s changed? Well, there’s been continuing pressure from activist shareholders like Carl Icahn. He’s said all along that PayPal could make more money if it were separated from eBay. Icahn thinks Ebay had a conflict of interest that held back PayPal’s growth. 

We can start seeing if Icahn’s right when PayPal becomes a stand-alone stock of its own. That’ll be after an initial public offering sometime later next year.  

 

 

 

 

 

 

 

 

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