For companies with stakes held by activist investors, it is not often a smooth ride. Carl Icahn bought a substantial amount of eBay’s stock, mainly because he wanted to see eBay spin off Paypal. He nominated two people to the board, but eBay management rejected the appointees and claimed they were “incompetent.” Carl Icahn blasted eBay CEO John Donohoe for his “inexcusable incompetence, ” and said he had issues with the sale of Skype while accusing two eBay board members of serious conflict of interest.
eBay management dismissed Icahn’s claims as a charade, and believes they were intended to drive up the stock price in hopes that Icahn would force a Paypal spin off following his war of words. While Paypal founder Elon Musk says eBay owning Paypal is “like Target owning Visa, ” eBay insists that there are valuable synergies between Paypal and eBay that makes their functioning under one roof more mutually beneficial than if they were separate. It seems that what eBay might think is one thing, what Wall Street might demand is another.