Carl Icahn Pushes For eBay To Spinoff PayPal; Buys More Apple ~ market folly

Thursday, January 23, 2014

Carl Icahn Pushes For eBay To Spinoff PayPal; Buys More Apple

Activist investor Carl Icahn has been busy yet again.  Firstly, he has disclosed a new position in eBay (EBAY) and he's pushing for the company to spin-off its fast growing PayPal segment.

This is not a new idea.  Plenty of analysts, sell-siders, and portfolio managers have voiced this sentiment before.  However, this might be the first time that a prominent activist has gotten involved and actually tried to make it happen.

Icahn's New eBay Stake

Icahn only owns 0.82% of the company and it looks like his activist push might already be dead on arrival.

Yesterday during eBay's earnings presentation, the company had one specific slide that highlighted why eBay and PayPal should remain together (seen here).

Then today, eBay's Chairman Pierre Omidyar (who owns 8% of the company) tweeted that he and the board were "fully aligned" that eBay and PayPal are best together.  Marc Andreessen tweeted the same.

As such, if Icahn wants to truly push for change, he'll perhaps need to drastically ramp up his ownership stake.  But as some investors have pointed out, perhaps his campaign has been more about awareness than activism.

Talking to Bloomberg, Icahn said he wants to get the word out to shareholders and if he can maybe get 51% of the shareholders to vote that they want it to happen, then maybe the board will take notice.  He did, however, acknowledge that it would be "difficult to convince management." He's also nominated two of his employees to eBay's board.

The video of Icahn's interview is embedded below:

Icahn Buys More Apple

The corporate activist also disclosed activity in another position of his.  This time, he took to Twitter to disclose that he had purchased $500 million more shares of Apple.  Icahn now owns over $3 billion worth of AAPL.

Icahn says that, "We feel (Apple's) board is doing great disservice to shareholders by not having markedly increased its buyback.  In-depth letter to follow soon."

blog comments powered by Disqus