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Breakingviews: Carl Icahn’s eBay circus

Thursday, Feb 27, 2014 - 03:09

Feb. 27 - Breakingviews columnists discuss the activist investor’s call for a PayPal spinoff from eBay and his public debate challenge to the company’s executives.

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Colleague John engaged a bit less backed with online auctioneer eBay is most recently today challenged eBay to a public debate on CNBC. About allegations he's made of conflicts of interests of the board of directors but rob what's really behind -- that is other -- making the right decisions and in particular should they be spinning off. PayPal -- shouldn't be be one company and we and we say they probably shouldn't -- an -- section for quite awhile if you look at the numbers it's it's pretty obvious that they should. Right went PayPal was small it help to have a bigger client is kind of pushed it in they read it you puffed up and you baiting Kirch PayPal were very well. Not so much anymore eBay saying like it's great you know 30% of new PayPal customers country ebitda means actually 7% cut for outside -- -- and that has always been this running. Thing that somebody like Amazon. Doesn't look what. With PayPal so much because it post is exactly why would I would you help arrival Wednesday that. I'm so this that the ideas since in -- off and you -- they'll do well. And we did the math and it looks like it's at least 15% increased -- offers -- that's not what you value PayPal like if you based it based on visa and MasterCard is have been great business service pastor reverend loves them. And and it is growing very quickly if you could separated out in micro even faster and so it should attract even more premium. And if you do the numbers it's under our conservative valuation -- it's it's about 40% of the company a lot of people are saying it's worth at least half of the day now when it goes. And of course you know. It Carl Icahn does he just want 15% bump. What does he really looking for that's sort of -- because. I mean -- presents a lot if you put a fair amount of money to work and get some leverage in an answer to but but I suspect he he thinks it's worth. For more than even our conservative numbers exactly that number by the -- you referenced it in 2008 we first -- We argued that. Actually Skype which they found the time doesn't really belong in there and hopefully it. And he and PayPal. Would be at Atlanta a stronger and of course perhaps a virus that rhetoric doesn't that are Skype to one of the members of well that any further you know that's that's -- sort of side so there's a lot of breakfast this -- Carla can love circus he's a real renounced him but he's he's put things -- like those three days straight every -- -- -- this CNBC. This this idea of having debate and of course they're not gonna do that. But you know that they're going after. That that -- The directors regret the board but to the mark in recent you know that is a really soft target because. It's almost into its heart it's hardly defensible and the fact that he's got all these investments in and competitors. -- twice what companies offer. Our businesses off of the day it's it's in this is bad government so it. Of course the dangers that you just it antagonize the directors and they say they -- yet or in their heels however given you know so many investors to view this these companies as he -- is -- undervalued they probably will push the computer's doing it. But -- rope and rope thank you very much we will follow that story that. Fight between -- inevitable breaking news tomorrow.

Breakingviews: Carl Icahn’s eBay circus

Thursday, Feb 27, 2014 - 03:09

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