back to article Icahn and I DID: eBay volte-faces, spins PayPal into separate biz

eBay has spun off its PayPal subsidiary after months of telling “noisy” activist investor Carl Icahn to shut up about it because it would never happen. With absolutely no sense of irony or tip of the hat to Icahn whatsoever, the online tat bazaar’s chief John Donahoe said in a statement today that a strategic review of the …

  1. Sir Barry

    I wonder if this has anything to do with eBay's UK tax arrangements.....

    1. Anonymous Coward
      Anonymous Coward

      Not sure, if a company is a totally different legal entity then it's not really going to be possible to use the split for tax purposes.

  2. Anonymous Coward
    Anonymous Coward

    Icahn do it, Icahn bring about change.

    Now Icahnhaveacheezburger.

  3. Tzhx

    >> current president of eBay Marketplaces Devin Wenig becomes chief of PayPal and senior American Express exec Dan Schulmann takes over as chief of PayPal.

    Guess Devin Wenig is actually becoming chief of eBay, rather than PayPal having two chiefs?

  4. Pete 2 Silver badge

    Can you hear a "rattling" sound?

    > it would be better for eBay and PayPal to operate separately.

    I wonder if that's the skeletons in PPs closet.

  5. BryceP

    I can always hope, though severely doubt, that this is a first step towards opening eBay to more third party payment processors (Square, Amazon, Google, Apple all come to mind). Though they are just as unregulated as PayPal, eBay has abused its position as having a dominant online retailer, _the_ dominant online auction and barter house, and, depending on where you live, _the_ dominant online commerce payment processor and money sender. They also have more to lose than eBay ever has. For the longest time, no PayPal meant no buyer or seller protection whatsoever. It also meant being subject to random account lock-outs, customer service's inability or obstinance in resolving issues (that they mainly caused), and the highest fees among any of the major online payment processors.

    Lock-in is bullshit. PayPal can't get shit out and made ripe for raiding soon enough.

    1. Anonymous Coward
      Anonymous Coward

      They almost certainly will

      Assuming this move makes Paypal truly independent, and eBay or its major shareholders don't retain a significant portion of shares, eBay has no reason to maintain an exclusive relationship with Paypal in the long run. They won't give any hints about this because they know it would damage the value of Paypal. Instead Paypal will talk about how it will be able to expand its markets since it won't be seen as being for eBay only, etc.

      I think Paypal may be very interesting to me a few months after IPO when it starts trading LEAPS, buying some puts for the January after next when that happens could become highly profitable as the value of Paypal will crash once eBay opens itself up to other payment methods.

      Apple Pay, along with Google Wallet once it also supports EMV, may become a preferred payment method online within the next few years. I think eBay is dumping Paypal now because they know it will never be worth as much in 2017 as it is worth today.

    2. Old Handle
      Thumb Up

      If eBay does away with the near obligation to use PayPal I will actually consider shopping there again.

      1. JDX Gold badge

        Rather surprised eBay haven't got in trouble before now, for using their dominant position in the online auction space to drive business to their online payments platform business.

  6. Alistair
    Coat

    Icahn dissasemble #5

    (although I'm sure its more than 5 he's hit I'm sure there are some that will get it)

    Lets see what happens to the rest of the property in the package. I do not hold my breath.

    1. Swarthy

      Re: Icahn dissasemble #5

      ""Hey, laser lips, your mama was a snow blower."

  7. Robert Heffernan

    Bought for a mere $1.5B

    But what a legacy that "mere" sum has produced for humanity. Shaking up two of the most incumbent industries in the world. Producing realitsically affordable commercial space travel and Electric cars with good range and performance.

  8. Purple-Stater

    Get it, but don't get it.

    I totally get the advantages of formally splitting into two formally separate corporations, but I don't quite grasp the desire to go public. Typically a company goes public in order to establish themselves and generate a cash flood to fund major investments. It doesn't make much sense to me that either eBay or PayPal would need to do that at this stage as neither needs cash for much and going public just means that a chunk of their profits needs to get spent (theoretically) to pay dividends.

    I can only assume that it's a corporate tax sorta thing.

    1. unitron
      Headmaster

      Re: Get it, but don't get it.

      The companies don't own themselves (at least not yet), corporations which are not currently public still have shares outstanding which are owned by people (although in this case other corporations *do* count as people, my friend), and going public is a way for those people to turn those shares into actual money.

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