Next year might bring a huge change for PayPal as eBay Inc (NASDAQ:EBAY) is gearing up for its spinoff. Following this news eBay Inc (NASDAQ:EBAY) shares took a nice jump in the stock market by 4% reaching a value of $55.48 on Thursday.
If this spinoff does happen in 2015 then this would mark a strategic change to John Danahoe, eBay’s CEO, who previously opposed the possibility of any spin off.
The talks regarding the PayPal spinoff first started back in January when Carl Icahn, an activist, suggested it to eBay. Icahn is a stakeholder in eBay with an ownership of 2%. He accused Danahoe along with other executives of mismanagement. The matter of the spinoff was resolved later in April when eBay agreed to the addition of an independent director. In June this year, PayPal’s CEO David Marcus left eBay to join Facebook. Later, eBay Inc (NASDAQ:EBAY) started to spread the word among its possible recruits about wanting a new replacement for the possible PayPal spin off.
However Danahoe still believes that marketplaces business and PayPal are more profitable when acting together. Last month eBay Inc (NASDAQ:EBAY) recorded its second quarter’s total revenue to be $4.3 billion out of which $1.9 billion was brought in by PayPal, which is a 20% jump up as compared to last year. The rest of the $2.7 billion was contributed by marketplaces and eBay’s other businesses – a jump by 9% as compared to last year.
eBay spokesperson Amanda Miller was approached to comment on the spin off situation to which she responded with this statement.
“The EBay Inc. board and management team remain focused on maximizing shareholder value,”, she further said,“As we discussed during proxy season and in our [second-quarter] financial results call, the board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both eBay and PayPal,”
This article has been written by Myra Rahmani, edited by Serkan Ünal.