Icahn Calls For ‘Strong And Independent’ eBay Board

Mar 13 2014 | 11:26am ET

Carl Icahn yesterday continued to hammer away at eBay Inc., summarizing his allegations against the company in an open letter to its shareholders.

Icahn has pushed eBay to spin-off its PayPal unit—a suggestion that eBay has rejected—and threatened a proxy fight for two board seats—eBay has called his candidates unqualified. And he has blasted the company’s sale of Skype and taken aim at two of its most prominent board members, alleging that they are rife with conflicts of interest.

In his latest missive, Icahn said the 2009 sale of Skype to a consortium including eBay director Marc Andreessen’s venture-capital firm “represents a complete and utter breakdown in the system of checks and balances,” and warns that “without a strong and independent board… eBay stockholders may again suffer a travesty even worse than what was visited upon them when Skype was sold prematurely and $4 billion of upside was lost.”

Icahn again took aim at eBay CEO John Donahoe, saying a recent interview with the executive has him lamenting “the fact that he had stockholders to answer to.”

Using all capital letters and frequently peppering his words with boldface and underlines, Icahn warns that “these types of shenanigans may fly in countries where decisions affecting millions of people’s lives are made in secret Politburo meetings.” But, he continues, in the United States, “nothing stays buried for long.”

Rushing to the defense of his director candidates, both employees of Icahn Enterprises, Icahn turns up the sarcasm.

“What makes one qualified in their opinion? Being a large stockholder of a direct competitor and interfering, as alleged by the Department of Justice, with eBay’s hiring practices on behalf of said direct competitor (current board nominee, Scott Cook)? Participating in a consortium that buys assets from the company and flips them for a quick and massive profit (current board member, Marc Andreessen)? Failing, as alleged by the SEC, to take steps to ensure that the accounting for stock options was proper and agreeing to disgorgement and civil penalties amounting to over $3.5 million (current board nominee, Fred Anderson)?”

And, unlike with Skype, time is of the essence in spinning out PayPal, Icahn concluded.

“eBay does not have years to wait. PayPal is a great company, but it is going to war against strong adversaries.”

“PayPal must be separated now so that great management can be attracted—management that can make the right decision and know when to sell at the right time, not the worst time.”


In Depth

Fitch Says Alternative Asset Managers 'Stable' Despite Dry Powder

Nov 20 2014 | 9:30am ET

Ratings agency Fitch says the outlook for seven publicly traded alternative asset...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.