Activist investor Carl Icahn finally got his way with eBay; the company is following his advice, or rather, caving to his pressure and is spinning off the online payment system, which is thought by many to be eBay’s greatest asset. eBay’s management argued against Icahn’s proposal, saying that there were compelling synergies between eBay and Paypal to justify keeping them under one roof. Nonetheless, BusinessWire reports that eBay President and CEO John Donahoe announced the split-up could be completed as early as 2015. Devin Wenig will take over as eBay CEO and American Express’ President of Enterprise Growth, Dan Schulman, will immediately assume the leadership of Paypal.
Management cited a “changing competitive landscape” as a compelling reason to divide the companies. Donahoe praised Wenig as an “exceptional global leader and operating executive, ” and said Schulman, “has a proven track record of leading complex technology businesses at at scale, driving sustainable growth and understanding how to innovate and drive competitive advantage.”
Dan Loeb, manager of Third Point, disclosed he had a “significant” stake in eBay, according to CNBC. It is thought that Loeb, along with Icahn, encouraged the spin-off. Ebay’s stock rose 7% on the news.