PayPal spinoff reports boost eBay stock

eBay is reported to have told PayPal job candidates that the company might be spun off from the ecommerce firm, news website The said in a report.

The report yesterday pointed out that just a few months after it fended off activist investor Carl Icahn's aggressive call for the spin-off of PayPal, eBay was putting the possibility across to candidates for the top job at the payment company.

Two unnamed sources told website that eBay was  suggesting PayPal could emerge as an independent entity within a year even as it moved to replace David Marcus at the helm of its payments arm. The company's stock surged 4.7 per cent to $55.89 on the news.

PayPal, the 2002 acquisition for which eBay paid $1.5 billion, is the fastest growing segment of eBay's business and could soon account for the major chunk of its revenues.

Launching a campaign for spinning off eBay's online-payments business in January, Icahn reportedly bought over $1 billion in eBay stock and attacked CEO John Donahoe and board members such as venture capitalist Marc Andreessen.

Icahn, with just over a 2-per cent holding in the   e-commerce company, has been urging eBay for weeks to spin off its PayPal payments business and has made repeated accusations against the company over poor corporate governance.

However in March eBay Inc rejected two nominees of  activist investor Carl Icahn to its board, claiming both were unqualified, forcing Icahn to drop his proposal for separation of eBay Inc from its PayPal (See: Icahn drops proposal for PayPal-eBay separation, board welcomes shift )

Icahn's campaign drew a number of high-profile backers to the company including PayPal co-founder Elon Musk, who had gone on to found Tesla Motors and SpaceX.

The public exchanges between eBay and Icahn, which stretched over three months, finally ended with a settlement, with eBay nominating an Icahn-approved board member and Icahn agreeing to drop his proposal to split off PayPal.

But not many believed that the last had been heard about the affair.

According to, eBay was a huge company that had a market valuation of $69.45 billion with $17 billion in annual earnings. eBay would naturally have any number of business plans for PayPal which could help amass high revenue for years to come. In the backdrop, a spinoff of its cash cow would be the last thing the company would be expected to think.

One possible reason, according to the site was that PayPal, would then be able to trade on its own, independent of the parent company, potentially unlocking its value by itself. It might even prove to much more lucrative than eBay in the stock market. Spinning off, offered a way to tell how it would fare on its own.