Ebay Releases Earnings, Icahn Pushes to Spinoff PayPal

EBay's (Nasdaq:EBAY) fourth quarter earnings were better than expected, driven by a strong holiday, surging mobile volume and solid marketplace results. In addition to the earnings announcement, activist investor Carl Icahn gave notice to eBay that he had nominated two of his employees to the company's board of directors and proposed spinning off PayPal as a separate company.

Ebay was quick to say that it does not plan to spinoff PayPal because it would not be the best move for shareholders. CEO John Donahoe said in a letter to employees that "we must not let Mr. Icahn's proposals become a distraction." He added that Icahn offered little detail why his proposal made sense. PayPal, which eBay bought for $1.3 billion in late 2002, is now growing faster than the company's core marketplace's business.

The company said that PayPal was, in fact, part of the reason the company has seen so much growth. The e-commerce company reported fourth quarter earnings of $850 million, or 65 cents a share, up 14 percent from a year ago. Companywide, revenue rose 13.5 percent to $4.53 billion for the quarter ended December 31. PayPal's total payments volume, a gauge of how much it is used to complete a transaction, rose 25 percent to $180 billion worth of transactions.

Looking ahead, for 2014, eBay forecast revenue of between $18 billion and $18.5 billion, while analysts expected a forecast of $18.5 billion.

For more see:
-this eBay press release
-this Wall Street Journal article

Related stories:
eBay Expands Same-Day Delivery Service; Adds Collections Feature
eBay Chief Backtracks On Holiday Spending Comments
Amazon To Compete With eBay On Streamlined Payment System
eBay Looks To Continue PayPal's Evolution With Braintree Acquisition
eBay Assures Consumers It Doesn't Share Data With The NSA

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