In 2014, Carl Icahn put eBay under pressure suggesting the company should split eBay and PayPal into two separate entities.
Initially, eBay rebuked Icahn stating, “…in our view, PayPal and eBay are better together.” But later in 2014, eBay announced it was splitting eBay and PayPal into two independent companies, effectively affirming Icahn’s reasons.
DeJa Vu All Over Again
Fast forward to 2019, and it appears there are two activist investors pushing for eBay to again spin off parts of their company.
According to numerous financial publications, Billionaire Paul Singer’s Elliott Management Corp. and Starboard Value LP are suggesting eBay to sell off its classifieds and Stub Hub business.
Specifically, Elliott Management Corp. sent a letter to the eBay board outlining steps they believe eBay must take that are “urgently needed.”
The primary concern by the investors seems to be the lack of growth by eBay during a time when the eCommerce industry is booming.
“Despite its remarkable history as one of the world’s largest e-commerce platforms, EBay as a public-company investment has underperformed both its peers and the market for a prolonged period of time.”
Elliott in the letter to the board of EBay
In response to Elliott’s letter, eBay released a statement today.
“The eBay Board and leadership team regularly engage with our shareholders and value their input. We are focused on delivering value for our shareholders, customers and employees by driving the best choice, the most relevance and the most powerful selling platform to deliver growth. Accordingly, we appreciate Elliott’s recognition of the strength and power of eBay’s business and will carefully review and evaluate Elliott’s proposals. We look forward to the opportunity to engage with Elliott, as we do with all shareholders.”
With eBay going through a transformation, including moving toward its own payments platform, it seems Wall Street is losing patience with the anemic growth by the marketplace.
There is even speculation that if eBay sheds the classifieds and Stub Hub businesses, the company itself could become a possible takeover target.
It seems eBay may be at a crossroads again trying to sort out its future. Stay tuned, this count get interesting again…
What do you think about this latest push by activist investors to further pull eBay apart? Please use the comments section below or head over to our Facebook Group for Small Business Sellers and interact with other small business owners.