Icahn wants eBay to spin off PayPal

EBay has rejected the proposal as it believes that the company's interest is best served by the current arrangement

Activist investor Carl Icahn has proposed that eBay spin off its payments unit PayPal into a separate company.

The e-commerce company has rejected the proposal, as it holds that payment is an integral part of commerce.

Icahn, who had previously opposed unsuccessfully the deal to take Dell private, is also demanding that Apple purchase stock from investors. On Wednesday, Icahn said in a Twitter message that his investment group had increased its stake in Apple, with its investment crossing US$3 billion.

EBay said Wednesday that Icahn informed it in a notice that companies controlled by him acquired shares and derivative securities earlier this month that give him an economic interest of about 0.82 percent in eBay. The investor also nominated two of his employees to the company's board of directors.

The board of eBay has explored in depth a spinoff or separation of PayPal and concluded that the company and its shareholders are best served by its current strategic direction, the company said.

"Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at global scale....," the company said. PayPal is also able to benefit from its parent's technology capabilities, commerce platforms and ties with retailers, brands and large merchants worldwide, it added.

From an online payment processor, PayPal has been broadening its market to include physical stores by offering a variety of new technologies, including its hands-free Beacon technology that uses the Bluetooth Low Energy standard for wireless communications between a store's point-of-sale system and the customer's smartphone to identify and authenticate users.

EBay said it would pass Icahn's board nominations to a committee of its board, "which will consider them in the ordinary course of business." Icahn's plan to spin off PayPal is in the form of a non-binding proposal.

The e-commerce company acquired PayPal in 2002, as it recognized that payment is a vital function in trading on eBay. Integrating PayPal's functionality into the eBay platform "will fundamentally strengthen the user experience and allow buyers and sellers to trade with greater ease, speed and safety," it said at the time.

The payments unit added 5.2 million active registered accounts in the fourth quarter, taking the total to 143 million users. Its revenue increased 19 percent in both the quarter and the full year, resulting in $6.6 billion in 2013, eBay said Wednesday.

Last month, eBay completed a $800 million acquisition of payments company Braintree. The payments company, which services startups like Airbnb, OpenTable, HotelTonight and Uber, is to operate as a separate service within PayPal.

Join the PC World newsletter!

Error: Please check your email address.

Tags business issuesInternet-based applications and servicese-commerceebaypaypalinternetrestructuring

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?