eBay Inc (NASDAQ:EBAY)‘s latest move to spinoff PayPal, something that Carl Icahn of Icahn Enterprises LP (NASDAQ:IEP) suggested a few months ago, is a resounding blow to eBay’s corporate governance structure. Kevin O’Leary, who is a Shark Tank investor explained on CNBC why it’s not just eBay’s CEO who needs to be punished on account of this mismanagement.
O’Leary stressed on two factors that highlight eBay Inc (NASDAQ:EBAY)’s blunder to fight off the suggestion made by Icahn Enterprises LP (NASDAQ:IEP). Firstly, the significant amount of shareholder’s money that was spent, or spilled and wasted, to fend off this idea, considering that the company’s management and board of directors is supposed to make sure that those funds are used in the best way possible. Secondly, the complete reversal of stance by eBay, not just a few years down the line, but only a few months.
According to O’Leary, this makes eBay Inc (NASDAQ:EBAY)’s board look corrupt or inefficient, or maybe both. They let the CEO of their company feed his ego or any grudge that he might have against Carl Icahn or Icahn Enterprises LP (NASDAQ:IEP), with the shareholders’ hard earned cash.
“[…] In the case of eBay Inc (NASDAQ:EBAY) board, it’s not just the CEO that should have been whacked. You could argue that the millions spent fighting Icahn, they should whack some board members too. Clean the whole house. There is nothing wrong with that outcome. And this is only months later. This is not years later, this is months later. They should be accountable for the millions of dollars they spent in print ads, fighting of Icahn’s idea, now showing the fruit of its results,” said O’Leary.
Julia Laroche of Business Insider, who was also present at the interview raised an interesting point in favor of activists like Carl Icahn or companies like Icahn Enterprises LP (NASDAQ:IEP). She said in today’s corporate environment where corporate governance still remains ac Achilles’ heel, such activists or companies could prove to be a proxy for shareholders’ will.
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