“Our focus is doing what we want and what shareholders, the other large shareholders, want us to do, which is stay focused on innovating and executing in the market. That’s the best way to drive shareholder value. That’s what I’m doing. That’s what we’re doing”.
Those were the words of John Donahoe in March 2014 when asked about the possibility of an eBay break up and spinning PayPal off due to the activities of activist investor Carl Icahn.
In April that year having temporarily calmed the waters, Donahoe said “We are very pleased to have reached this agreement with Carl, settling proxy issues and enabling our board and management team to focus our full attention on a goal every shareholder agrees on – growing PayPal and eBay, and delivering sustainable shareholder value”.
Icahn responded “I am optimistic that this arrangement with eBay will enhance our ability to discuss large issues affecting the company with greater intelligence and will help to enhance shareholder value”.
We discovered just how much shareholder value was created with the spin off of PayPal which saw Donahoe jumping ship faster than a scalded rabbit to leave with PayPal and likewise Icahn considered he’d raped eBay Inc enough and by November 2015 had sold off all his remaining shares in eBay.
This is when Devin Wenig took command of the eBay mothership and, now with activist investors breathing down his neck, this time around the language is remarkably similar. Rumours have been rumbling since October last year leading to a letter from Elliott associates in January this year. eBay’s response saying “We are focused on delivering value for our shareholders, customers and employees by driving the best choice, the most relevance and the most powerful selling platform to deliver growth”, largely mirrored that of Donahoe back in the days of Icahn and PayPal:
Then came the Elliott response to eBay earnings two months of behind the scenes bargaining and negotiations and before we know it eBay has appointed financial advisors, legal council, popped a couple of new Directors onto the board including one from Elliott and Devin Wenig says “The bottom line is that we all share common ground: we see tremendous opportunity ahead and want to see eBay’s full potential realized over the long-term.”
Let’s check out Carl Icahn’s statement from 2014 and compare it to the words of Jesse Cohn, the new eBay Board representative from Elliott:
“I am optimistic that this arrangement with eBay will enhance our ability to discuss large issues affecting the company with greater intelligence and will help to enhance shareholder value”.
– Carl Icahn 2014
“Our discussions with Devin and the Board have been positive and productive, and we are pleased to have worked collaboratively to reach this agreement. We are confident that the initiatives announced today will drive meaningful shareholder value.”
– Jesse Cohn, Elliott, 2019
Both statements talk about shareholder value, that’s all investors are interested in. The first statement was made en route to an eBay break up and spinning off PayPal. The second doubtless again a temporary calming of the waters but most likely a portent for another eBay break up, news of which will probably break in the Autumn. The only question is will it be the eBay marketplace that’s sold or will the marketplace remain with shareholders and just Stubhub and eBay Classifieds be spun off?