The Atlanta Journal-Constitution
Investor calls for urgent changes in letter to eBay board
Less than four years after eBay split from PayPal with a promise of reinventing itself to compete in the age of Amazon, investors are circling the online marketplace and pushing for it to break apart further and sell the pieces.
Billionaire Paul Singer’s Elliott Management Corp. sent a letter Tuesday to the board of eBay outlining steps it says are “urgently needed.” Elliott, which owns more than 4 percent of eBay, proposed a five-step plan that involves reviewing eBay’s portfolio of companies, including StubHub, revitalizing the company’s marketplace and buying back shares.
Meanwhile, the Wall Street Journal reported that another activist investor, Starboard Value, has built a position of less than 4 percent in eBay and has been talking with the company for months, urging it to consider separating some businesses, including Classifieds. EBay surged the most in almost a year, gaining as much as 12 percent to $34.75 Tuesday.
The letters are the latest sign of pressure on Chief Executive Officer Devin Wenig, who took over the company following its split with PayPal in 2015 and made bold promises of returning the marketplace to prominence. But the results have been slow going and eBay continues to watch Amazon.com grow at a much faster pace and gobble up more marketshare and customers. EBay has launched marketing campaigns to expand beyond its base of mostly 50-plus year old men, but investors want more.
“Despite its remarkable history as one of the world’s largest e-commerce platforms, eBay as a public-company investment has underperformed both its peers and the market for a prolonged period of time,” Elliott wrote in the letter.
Elliott sees eBay’s shares valued at $55 to $63 a share, potentially doubling their value from Friday’s close, if the company follows its recommendations.
In a response, eBay said it would “carefully review and evaluate Elliott’s proposals.”