eBay Without PayPal – Buyer and Seller Paradise (or the wild west)??

Well, well, well, we can’t say that we’re in any way surprised: One of the world’s most successful investors, Carl Icahn, who has a stake in eBay, wants its management to spin off PayPal. Our reaction is perhaps best summarised by THIS: We can clearly see how this would add value for shareholders. PayPal is the jewel in eBay’s crown, and produces the bulk of the profits. Divesting the PayPal division would give shareholders a disproportionate return to current valuations. (Imagine the combined Ebay entity is currently worth $100 dollars. Selling Paypal may yield $80 and the lone eBay entity may still be worth $50 – a profit of $30 for shareholders. In other words, it’s currently worth less the sum of separate component parts. Classic asset stripping from one of the world’s greatest corporate raiders – Mr Icahn you’re a genius). But we’re really unsure about the implications for…

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