Investor Carl Icahn is turning up the heat on eBay, attacking the online retailer's board as dysfunctional and blaming a key director for placing the company at a competitive disadvantage against a key rival.
Icahn has been pressing eBay's board to spin off its PayPal payment division to unlock shareholder value, which the company has rejected. He's also seeking to elect his own slate of directors.
After blasting CEO John Donahoe's "ineptitude" earlier this week, the billionaire says in a Wednesday letter to shareholders that eBay directors Marc Andreessen and Scott Cook aren't looking out for shareholder interests. EBay earlier sold a controlling stake in Skype to Andreessen and Silver Lake Partners investment group for about $1.9 billion, which was later sold to Microsoft for $8.5 billion.
Icahn, a legendary Wall Street fighter and at 78, still a force to be reckoned with when it comes to upending the corporate status quo, is an activist known for taking the gloves off in his battles with CEOs, boards and business rivals. Wednesday, the blows came down especially heavily on Andreessen and Cook.
"Message to the eBay board: Corporate governance failures do not have a shelf life," Icahn tells shareholders. "Whether this occurred 2, 5 or 10 years ago is irrelevant, especially when that board member is still on the board. The phenomenal payday for Mr. Andreessen and Silver Lake Partners raises serious red flags."
Icahn says that during Andreessen's time on eBay's board, he's had access to non-public information that's allowed him to invest and advise several direct competitors.
Icahn also blasted eBay for allowing Cook to remain as a director. Cook, a former Intuit founder and CEO who is also an Intuit director, owns nearly $1 billion in shares of Intuit -- a major PayPal competitor.
"Why is Mr. Cook still on the board of eBay?" Ichan asks. "Is it good for PayPal to have a competitor in the board room gaining insights into its operations, product pipeline and proprietary technologies?"
In a statement, eBay urged Icahn "to stick to the facts, Carl."
"Icahn doesn't let the truth get in the way of a good story. And while his letters and media interviews may be entertaining, they are not factually accurate. In fact, Mr. Icahn seems to be deliberately disseminating claims that are dead wrong. The claims against Mr. Cook and Mr. Andreessen, in particular, are blatantly false. We challenge Mr. Icahn to end his own charade with our shareholders. Let's focus on honest, accurate debate."
EBay says it kept a 30% stake in the Skype sale, and that in deliberations about its sale, Andreessen "recused himself from all deliberations on this transaction."
The company did not comment directly on Cook's Intuit stake.
EBay closed up 2% to $57.34 Wednesday.
© 2014 USA TODAY under contract with MarketWatch. All rights reserved.
Posted: 2014-03-01 @ 6:26pm PT
Icahn has no idea how deep the well is when it comes to eBay's fraudulent activities designed to prop up their earnings. They are engaged in fraud to steal fees from Sellers by NOT posting listings to their user base. Ebay even granted itself permission to sometimes even make a seller's items not visible at all (Oct. 2013 User Agreement update). They know American's are hurting and there will be a consistent stream of new sellers registering to try and sell. Their blatant goal is to steal posting fees from sellers as long as they can by not posting items for sale, as well as creating a hostile enviroment so sellers voluntarily depart or can be de-registered. They cap many sellers limits secretly based on a variety of criteria using "Bots" so that if they are investigated they can point their finger at the technology to keep the heat off of the execs. But ex-employees of eBay have been in meetings where eBay executives and supervisors have said the intended goal is to make it impossible for small to mid-size sellers to survive. Ebay is engineered through CEO John Donahoe's "Disruptive Innovation" designed by Donahoe and his Ivy League Trust Baby cronies who have no idea what it is to be a small to mid-size American business owner. They must be called out once and for all and held accountable. Ebay has crossed the line. They are actively involved in FRAUD.
Posted: 2014-02-28 @ 8:17pm PT
Don’t let the truth get in the way …
"Carl Icahn doesnt [sic] let the truth get in the way of a good story. And while his letters and media interviews may be entertaining, they are not factually accurate ... We challenge Mr. Icahn to end his own charade with our shareholders."—eBay Press Release
Too funny, particularly considering the disingenuous nonsense that habitually flows out of the eBay Dept of Spin, and the above inference (accidental no doubt) that eBay itself has a charade-like relationship with its shareholders …
Posted: 2014-02-28 @ 3:02pm PT
Notwithstanding that I am otherwise a vociferous critic of eBay, this time I have to agree with Johnny Ho that eBay should not let go of “PreyPal”. As great a fool as he is, Johnny Ho knows that without its existing integrated relationship with the eBay marketplace, the value of the clunky “PreyPal”, as a stand-alone, would be reduced catastrophically (eBay actually generates ~30% of PayPal new users with no customer acquisition costs for PayPal and half of PayPal's profits come from transactions on eBay where “PreyPal” is well integrated); and, worse still, without “PreyPal”, the value of the eBay marketplace would be reduced by some 40% (“PreyPal” currently contributes ~42% of eBay’s profits) …
I hate to admit it, but for once Johnny Ho has got it right; with respect to “PreyPal”, Carl Icahn does not know what he is talking about and clearly has no understanding of the value of the inextricable and mutually supporting nature of the incestuous relationship between these two clunky, disingenuous, unscrupulous, commercial entities, and in particular, the precariousness of PayPal’s clunky business model …
Regardless, none of the above can outweigh the fact that Johnny Ho is otherwise a talentless, destructive, narcissistic sociopath and that under his direction eBay Inc. is proceeding down the toilet and is ultimately going to finish up at the sewage farm …
The fact is, notwithstanding the amount of disingenuous noise that constantly emanates from the eBay Dept of Spin, “PreyPal” is a clunky middleman riding precariously on the backs of the retail banks existing payments systems, and it has little more than one percent (~1.1%) of the world’s total payments business (and even then much of that is funded via MasterCard/Visa sources); the “bankcards”, MasterCard and Visa, have ~90% thereof between them and Amex has another ~8%, and both MasterCard and Visa have recently launched their own professional mobile/plastic POS/online digital wallets…
The reality is that the clunky PreyPal’s “best before” date is fast approaching; as a “stand-alone” operation that “best before” date would simply arrive even sooner …
“Never ever hire an MBA; they will ruin your company.”—PayPal founder, Peter Thiel