“eBay paid its first cash dividend of 14 cents per share to shareholders:” is the news eBay CEO shared via Twitter yesterday. The announcement marks eBay’s promise made in January to pay first-ever dividends to their investors in March.
In the last quarter, eBay achieved $763m in revenue, with just under $130m dividends paid to eBay shareholders.
“Today eBay paid its first cash dividend of 14 cents per share to stockholders. This is the first dividend program in eBay’s history and marks a significant milestone for the company. We’re delighted to share the company’s ongoing success with our fellow shareholders.”
– Devin Wenig eBay CEO
eBay have started carrying out their promise to return substantial capital to shareholders. However, the question is whether dividends will be enough to appease eBay investors.
eBay’s largest investor with shares worth about $1.4bn (£1.07bn), Elliott Associate want to split and sell the business units off and strip out layers of management to return millions to shareholders as a result of their disappointment in eBay’s recent performance.
So 17% of revenue goes to SHAREHOLDERS instead of being invested in the creaking site or to cut the cost of selling on Ebay.
This money is made entirely off the backs of Ebay sellers and is being given away so Wenig and Co can keep their jobs for a bit longer.
Shareholders always want more, so the next dividend will have to be even bigger to appease them.
Let’s see if Ebay give sellers a “dividend” in the seller release, shall we?
Or will it be the usual kick in the teeth for sellers with more fees rises and more pointless complication.
eBay is in a very vulnerable position and ripe for plundering. With such weak upper management it won’t be long before the vultures swoop.
Wenig’s hand was forced into this as a direct result of the Elliott activist proposal calling for a dividend: “..Given eBay’s highly cash-flow-generative model, we believe the Company can easily sustain a modest dividend.” – Jesse Cohn
Wenig publicly posturing that this was somehow his plan that he’s “delighted to share” is hilarious and just further illustrates what a sketchy weasel the guy is.
He’s very fortunate Elliott was around to give him a strat plan to execute on.
Wenig should be relieved as CEO, and fingers-crossed he will no longer be the CEO of eBay’s marketplace in 12 months.
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