Carl Icahn, whose Icahn Enterprises LP (NASDAQ:IEP) owns 30.8 million shares out of eBay Inc (NASDAQ:EBAY)’s 1.24 billion, influenced the company to detach PayPal from itself, according to Bloomberg. eBay Inc (NASDAQ:EBAY)’s officials do not mention the implication of the heavyweight investor in the decision-making process for the spin-off, but it seems that they are just trying to bury their heads in the sand.
Besides Icahn Enterprises LP (NASDAQ:IEP), many other shareholders at eBay Inc (NASDAQ:EBAY) tried to push the deal, but they were presented reasons why it is not time yet instead. We can be certain to get to see the actual proceedings of the much expected event.
“A lot of investors for a long time have been arguing that PayPal should be split off from eBay just simply because PayPal is a much faster growing business therefore, presumably, would demand a much higher valuation in the market place and that would be beneficial to all shareholders,” said Bloomberg Intelligence’s Paul Sweeney.
eBay Inc (NASDAQ:EBAY)’s price skyrocketed with the markets digesting the news, it’s currently wandering near the $56.8 target, a spike of almost 8% during the day, practically twice the value for the company’s year to date increase in value.
“It is getting more competitive certainly, but PayPal is in a fantastic position and they really built hteir business on the backs of eBay and eBay counts for almost half of the payment value on PayPal. So PayPal is the big player in the market,” added Paul Sweeney.
Hopefully, this temporization of the split wasn’t pursued to cover up some losses that the company is experiencing in the highly competitive market of e-commerce, which has been shuttered recently by the biggest Initial Public Offering in history. In any case, eBay Inc (NASDAQ:EBAY)’s decision is saluted by most of the shareholders and potential investors.
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