Carl Icahn Pressing eBay For PayPal Spinoff

Carl Icahn

(Forbes) Payment platform PayPal has been one of the biggest money-makers for eBay, but if activist investor Carl Icahn gets his way, the e-commerce platform would have to envision a future without one of its best sources of revenue: In eBay’s fourth quarter earnings report, released Wednesday afternoon, the company announced that Icahn is pushing for a spinoff that would turn the PayPal business into its own company.

Carl Icahn

In the earnings release, eBay reported that Icahn has nominated two of his employees to its board of directors and submitted a non-binding proposal for a spinoff of the PayPal business into a separate company. Icahn revealed that he has an 0.82% stake in eBay, so he is far from its largest shareholder (though he may have the biggest megaphone). And indeed, PayPal had a great fourth quarter: its revenue increased 19% to $1.8 billion for the quarter, gaining 5.2 million accounts and ending 2013 with 143 million accounts, a 16% increase over 2012.

However, eBay said that while it “welcomes” the opportunity to listen to the opinions of all its shareholders, the eBay board of directors has “explored in depth a spinoff or separation of PayPal” and has concluded that the company would be best served if PayPal remains in the fold. “Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at global scale, creating value for consumers, merchants and shareholders,” eBay said.

With regard to the actual earnings part of the earnings release, eBay reported better-than-expected fourth quarter results Wednesday afternoon, posting non-GAAP net income of $1.1 billion, or earnings of 81 cents per share — a 16% increase over the same quarter in 2012 and beating the Street consensus of earnings of 80 cents per share. Though the e-commerce site’s fourth quarter revenue came in a shade under the analyst consensus of $4.54 billion, eBay reported $4.53 billion in revenue for the quarter, a 13% increase over the prior year period.

On a full-year basis, eBay recognized $16 billion in 2013 revenue, a 14% increase over 2012. Full-year net income on a non-GAAP basis came in at $3.6 billion, resulting in earnings of $2.71 per share. This is a 15% increase over 2012.

“We feel good about our performance and strong finish in the fourth quarter, with the holiday shopping season clearly showing how online, mobile and other omni-channel commerce capabilities are changing how consumers shop and pay,” eBay president and CEO John Donahoe said in a statement Wednesday afternoon.

Donahoe also said that mobile exceeded the company’s expectations for the year, with 2013 mobile commerce growing 88% and adding 14 million customers for the year.

eBay also issued its 2014 guidance Wednesday afternoon, and is calling for first quarter fiscal 2014 revenue to fall in the $4.15 to $4.25 billion range, with non-GAAP earnings per share coming in somewhere between 65 cents and 67 cents per share. For full-year 2014, eBay predicts revenue in the $18 to $18.5 billion range, with non-GAAP earnings of $2.95 to $3.00 per share.

Following the release of the earnings report, shares of eBay took off in after-market activity, enjoying a 6.5% bump in post-bell activity. The stock had closed Wednesday trading with just an 0.5% gain.

Carl Icahn

Doc from Ebay Motors Sucks did an article about how eBay Motors used to be a community in the old days and said this – “It’s sad because this board used to have some of the best brains in the car business hanging out on it. There was never a boring minute there. There were prospective car buyers asking questions, and they always got the help they needed. The regulars often just logged in and said good morning to each other 1st thing in the morning. Told jokes and posted links to articles of interest. Lots of the car dealers posted photos on a new car they just bought. It was fun and entertaining, and the best place on the net to get automotive related help.

This was the eBay Motors Community at it’s finest.” Please watch the video below of a major security issue still being used to this by hackers or eBay API developers to send unsuspecting buyers to outside websites looking like eBay in every way. Hackers use this to phish and scam. eBay Inc refuses to fix the issues. Maybe their lavish trust and security team is on vacation.

Carl Icahn Shareholders Don’t Know About Ebay Fraud

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