eBay is arguably the biggest online auction powerhouse and has been for quite a few years now. Back in 2002 it acquired internet payments giant PayPal for $1.5 billion. This move was seen as a way for eBay to increase the number of transactions being processed by PayPal through diversion of its users towards the payments service. Over a decade after the acquisition eBay has now formally confirmed that PayPal will be spun off into a separate company next year.
Carl Icahn had to wait several months, but the activist investor got his way — again. Online marketplace eBay announced Tuesday it will split from the mobile payments service PayPal — a spinoff long sought by Icahn — forming two independently traded companies beginning in 2015. Icahn has clamored for an eBay-PayPal split since February, when he first pushed eBay to spin off PayPal to unlock value for shareholders. The proposal prompted heated exchanges between Icahn and eBay, with the investor slamming president and CEO John Donahoe for “ineptitude,” and eBay founder Pierre Omidyar defending the company from “false and misleading” attacks. As expected, Icahn praised the split. “As I have said in the past and have continued to maintain, it is almost a “no brainer” that these companies should be separated to increase the value of these great assets and thus to meaningfully enhance value for all shareholders,” he said in a statement.
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