Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

eBay Inc (EBAY)’s John Donahoe Started To See PayPal As A Grown-Up Company

eBay Inc (NASDAQ:EBAY)’s been fueling PayPal for quite a while and now the baby-company is ready to make its first steps as an independent legal entity, according to CNBC. This comes as a result to pressures from Alibaba Group Holding Ltd (NYSE:BABA)’s tech empire that might crush the smaller e-commerce company on its rise. The spin-off is meant to hedge risk for the investors that currently have a stake in eBay Inc (NASDAQ:EBAY).


The company’s trading at $52.66 per share, its price declined by some 0.5% during the last trading day and it shows a weak performance for the last two months. Also, the company’s down by about 4% year to date. Probably, in the context of future prospects, this separation seems the best opportunity to grab onto in order to succeed.

“eBay and PayPal have been better together over the last 12 years and certainly over the last 6. But, what’s changed is we’ve just come out of our annual strategic planning process, the same process that the board and I do every year, where we look forward, we look forward about how to best position the company over the next 3 to 5 years,” said John Donahoe, eBay Inc (NASDAQ:EBAY)’s CEO.

So far, PayPal has profited from a series of benefits in the form of new clients, acquisitions’ data, and free funding from its current parent business. However, this will soon not be enough for the former to thrive, which might be detrimental also to eBay Inc (NASDAQ:EBAY) eventually.

“The synergies that I talked back earlier in the year are still there, but they naturally decline over time. You know when you look forward eBay will be less than 15% of PayPal’s business three years from now and we can achieve many of the benefits of these synergies through arm’s length commercial relationships,” added John Donahoe.

PayPal’s shares will also be traded publicly and the company might get more interest from eBay Inc (NASDAQ:EBAY)’s competitors that didn’t pursue a contractual agreement due to fears that the payments system will show impartiality towards its parent company. Everything should fare well as this is not the first spin-off ever performed, not even the first in the same category.

Disclosure: none

Warren Buffett and BillionairesFree Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.