Icahn Targets eBay, Pans Apple Board on Same Day
Investment agitator Carl Icahn has now put his sights on auctioneer eBay, but that doesn't mean he will end his pursuit of a massive stock buyback by Apple, an analyst said today.
Thu, January 23, 2014
Computerworld — Investment agitator Carl Icahn has now put his sights on auctioneer eBay, but that doesn't mean he will end his pursuit of a massive stock buyback by Apple, an analyst said today.
"Icahn is more than capable of targeting more than one company at the same time," said Patrick Moorhead, principal analyst of Moor Insights & Strategy, in an email.
Moorhead was responding to questions after eBay acknowledged that Icahn, known for his hounding of corporate leaders and boards he believes are not doing their jobs, had acquired a less-than-1% stake in the online auction giant, had nominated two of his employees to the board, and had submitted a non-binding proposal that asked eBay to spin off its PayPal unit.
PayPal, which was acquired by eBay in 2002 for $1.5 billion, accounted for approximately 41% of eBay's total net revenue in 2013, up slightly from 40% the year before. In 2013, PayPal's net revenue climbed 19% to $6.6 billion.
Icahn's actions were detailed by eBay in a filing Wednesday with the U.S. Securities and Exchange Commission.
"We believe strongly that PayPal and eBay are far more valuable together than apart," wrote eBay's president and CEO John Donahoe on Wednesday in a letter to employees. "The synergies are clear. PayPal has succeeded because it is a part of eBay, not in spite of it."
Also in the letter, Donahoe urged eBay employees to stay focused. "We must not let Mr. Icahn's proposals become a distraction for us, (emphasis in original)," the CEO wrote.
Good luck with that, Moorhead has said about Icahn's eye on Apple. "This is absolute trouble," Moorhead said in an interview last year when Icahn first disclosed his Apple intentions. "This makes [CEO] Tim Cook's job a lot harder. Not only does he have to bring Apple back to the expectations level [of years past] but now he has to deal with Icahn. And that's a full-time job."
And Icahn's newest move won't let Apple off the hook.
"I have no reason to believe it will get any easier for Apple," said Moorhead, who has followed Icahn's moves, particularly the investor's unsuccessful attempt to quash Michael Dell's plan to take the computer maker he founded private last year.
In fact, on the same day that eBay said Icahn was pushing for a breakup, the 77-year-old billionaire tweeted more about Apple.
"We feel [Apple's] board is doing great disservice to shareholders by not having markedly increased its buyback," Icahn said on Twitter Wednesday. He also promised to soon publish a more detailed explanation of his new plans or demands.