Elliott Management Issues Blunt Statement on eBay Earnings

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Earlier in the month, activist investor Elliott Management suggested that eBay needs to embrace dramatic changes, including possibly spinning off classifieds and StubHub.

READ MORE: eBay Urged to Spin Off Classifieds and Stub Hub by Activist Investors

Now that eBay reported Q4 and full 2018 earnings on Tuesday, the investment firm is again criticizing eBay management.

In a statement, Elliott said:

“eBay’s fourth quarter earnings provided another example of why the Company needs to significantly improve operational execution and focus on its core Marketplace business. Despite a rapidly growing e-commerce market, eBay once again lowered Marketplace growth expectations to a paltry 1% for 2019.

It is clear eBay needs urgent change including a holistic operational review which will produce lasting efficiencies and improved execution. Without question, this focus must include a strategic review that evaluates a separation of Stubhub and Classifieds, which is even more necessary given an increasingly disappointing Marketplace outlook.

These steps are detailed in our plan from our letter, and we look forward to working collaboratively with the Company on improving eBay for all stakeholders.”

Shades of The eBay PayPal Split

The last time eBay was engaged with an activist investor, it was about spinning off PayPal into its own business unit.

While eBay initially pushed back at the idea, within a matter of months it announced it was going to split eBay and Paypal into independent companies.

With eBay’s own mediocre outlook on GMV until 2020, it appears the marketplace is under fire again to stimulate shareholder value by spinning off parts and concentrating more on the core marketplace business.

As eCommerce continues to grow, eBay’s core marketplace business is relatively flat. Even PayPal no longer is really banking on eBay revenues for its future.

READ MORE: PayPal Working on Life Without eBay Revenue

Will eBay blink and spin off at least some part of itself? Time will tell, but the voices that something more drastic must happen apparently are not going away.

What do you think about this push from activist investor Elliott Management that changes are necessary now? Please use the comments section below or head over to our Facebook Group for Small Business Sellers and interact with other small business owners.

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