Starboard, Elliott Management Call on eBay to Shed StubHub, Classifieds -- Update
22 Janvier 2019 - 5:29PM
Dow Jones News
By Cara Lombardo and Kimberly Chin
EBay Inc. is being circled by a pair of activist investors who
want the online marketplace to consider parting ways with its
StubHub ticketing and classified-ads businesses.
Elliott Management Corp. announced Tuesday that it has a more
than 4% stake in eBay and urged the online marketplace to consider
spinning off or selling StubHub and the classifieds business
because they could be worth more on their own.
Another hedge fund, Starboard Value LP, also has a large
position in eBay of less than 4% and has spoken to the company
about those same changes, according to a person familiar with the
matter.
Starboard took the stake at least six months ago and has been
talking to the San Jose, Calif.-based company in recent months
about improving its operations and potentially separating the two
businesses similar to the way it previously spun off payment
platform PayPal Holdings Inc., the person said.
Through Friday, eBay shares were down about 20% over the past
year. They jumped 8.6% to $33.68 in early trading Tuesday on news
of the two activists' involvement. The company has a market value
of roughly $30 billion.
EBay said in a statement that it values its shareholders' input
and will carefully review Elliott's proposals.
In a letter sent Tuesday to eBay's board, Elliott also said eBay
should focus on revitalizing its core marketplace business, make
operational improvements to improve its margins and ensure it has
the right leadership team in place. Elliott also indicated in its
letter that eBay's core marketplace, if separated from its other
businesses, could be sold to a private-equity firm or a strategic
buyer eager to expand its online footprint.
Elliott says in the letter that eBay created a unique forum to
match buyers and sellers, but has failed to take advantage of more
sales moving online. Elliott partner Jesse Cohn notes his own
mother has sold jewelry on the website for over a decade.
StubHub, which eBay bought in 2007 for $310 million, accounted
for about 14% of eBay's more than $2 billion of revenue in its
third quarter last year. Its classified business made up about 12%.
The company is set to report its fourth-quarter results next
week.
EBay has attracted activists in the past. Billionaire investor
Carl Icahn showed up in eBay's stock in 2014 and urged a breakup.
Following its own review, eBay spun out PayPal, giving each eBay
holder a new share in PayPal, which is now itself a company worth
more than $100 billion. Mr. Icahn sold out of his eBay position
soon after the split and last year exited his stake in PayPal, with
it having roughly doubled in value since the spinoff.
Write to Cara Lombardo at cara.lombardo@wsj.com and Kimberly
Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
January 22, 2019 11:14 ET (16:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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