Carl Icahn Issues Letter To eBay Shareholders

Carl Icahn Issues Letter To eBay Shareholders

An open letter was issues by Carl Icahn to the shareholders of eBay that criticized the board and managers of the online commerce company for numerous alleged lapses and conflicts of interests.

The activist investor indicated on the letter that the complete indifference to accountability within the company was the most obvious he has ever seen. He aimed at two members of the board of directors of the company, Scott Cook and Marc Andreesen.

Icahn criticizes the two men for advising and investing in companies that are considered as direct competitors of eBay. The investor indicated that Andreseen invested in Coinbase and Boku. On the other hand, he criticized the financial stake and board seat of Cook in Intuit.

Carl Icahn also indicated that John Donahue, CEO of the company, seemed to be unaware of the things happening on the board and on the marketplace.

However, the company indicated that the company’s new shareholder took news items out of context in his tirade against the integrity of two respected leaders in Silicon Valley. It added that it was unfortunate for Icahn to resort to a smear campaign against the two directors.

An increase of three percent was noted in the shares of the company.

Icahn indicated that he was able to acquire a 0.82 percent stake in the company and nominated two employees into the board of the company. He also revealed a proposal recommending the spinoff of PayPal from eBay into a separate company. Although a gray area exists in board members becoming advisers to different companies that may compete with each other, it is not rare, according to GMI’s Gary Hewitt.

Hewitt said Icahn opted to use a particular characterization for the situation. He added that the board will not find it easy to regulate itself. Although some benefits may arise from the situation, shareholders hold the final decision on the people who will become a part of the board.

The letter reiterated the decision of Icahn in separating PayPal from the company. It indicated that it will be economically sensible and will enhance innovation when the PayPal and eBay are separated.

Posted by James Fried on Wednesday February 26 2014, 3:43 AM EST. Ref: CNN. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0