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EBay ponders PayPal spin-off - report

22 August 2014  |  8923 views  |  0 PayPal logo

Shares in eBay rose nearly five per cent yesterday afternoon off the back of a media report that the online auction house could spin off its PayPal unit as early as next year.

Citing sources, tech site The Information says that eBay has been telling candidates for the role of PayPal president - vacant since David Marcus jumped ship for Facebook earlier this year - about the potential split.

The speculation saw shares in eBay rise 4.7% to $55.89 at the close of trading yesterday in New York.

The report comes despite the fact that eBay spent much of the year fighting off attempts by activist investor Carl Icahn to force such a spin-off. Ichan argued that that the auction site was hampering the growth and competitiveness of its payments subsidiary but eventually backed down.

In response to the new report, eBay issued a statement saying: "The EBay Inc. board and management team remain focused on maximizing shareholder value. As we discussed during proxy season and in our second-quarter financial results call, the board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both EBay and PayPal. This position has not changed."

Former PayPal executive Keith Rabois has backed a split but has also floated an alternative - rebranding eBay as PayPal. Rabois told Bloomberg: "Change the logos, change the paint, change the T-shirts, and you get the same value basically as spinning off PayPal. Just rename the company. It's a really simple solution. You could do it in probably 24 hours."

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