eBay Inc (NASDAQ:EBAY) CEO Getting It Twisted?

Boston, MA 03/07/2014 (wallstreetpr) – EBay Inc (NASDAQ:EBAY) needs some cooling. But who will put his gun down to get the water? The company which is a household name in the e-commerce industry is fighting against an activist investor about how to deal with its widely profitable online payment business.

EBay Inc (NASDAQ:EBAY) is best known for its online marketplace, and perhaps how it is giving rival Amazon.com Inc (NASDAQ:AMZN) sleepless nights. In 2002 the company acquired PayPal which is arguably the world’s most famous online payment service. As more and more companies outsource jobs and online transactions catching flame, PayPal has been a money-making machine for eBay Inc (NASDAQ:EBAY).

Perhaps for your information, PayPal was co-founded by Elon Musk, the celebrity CEO of electric car maker Tesla Motor Inc (NASDAQ:TSLA).

So far, that’s a good story, or it seems to be.

Small holding, big demands

EBay Inc (NASDAQ:EBAY) is being taken to task by investor Carl Icahn for why the company is clinging onto PayPal. According to the most recent filing data, Mr. Icahn owns just a little over 2 percent stake in eBay Inc (NASDAQ:EBAY), yet he is not only making big demands, but is already a thorn in the flesh of the company’s management.

The activist investor wants PayPal to be run as a separate company from eBay Inc (NASDAQ:EBAY). Among other things, the investor says the move will allow the online payment business to even get profitable deals from eBay Inc (NASDAQ:EBAY) competitors. But you know what, eBay CEO John Donahoe and his management team will hear none of that. So, Mr. Icahn just said that his fights have not yet even begun.

Investors’ position

Now that the fight to spin-off or retain PayPal pits the management against Mr. Icahn, there is has been the question about what other big investors say. The CEO recently claimed that most big investors were of the opinion that PayPal should be retained. Yet Mr. Icahn is citing a research document which claimed that most eBay Inc (NASDAQ:EBAY) investors wanted the business split.

It now seems there will be more fireworks coming from the management and Mr. Icahn’s camps.

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Published by Christine Lawrence

Christine Lawrence is a financial analyst. She loves analyzing socioeconomic trends in the background of financial moves. She has overall seven years of experience in Auditing, Finance and Writing.

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