Icahn Proposes PayPal IPO in Which eBay Maintains Majority Control

eBay CEO John Donahoe


eBay CEO John Donahoe


Billionaire activist investor Carl Icahn proposed today that eBay spin out 20 percent of PayPal in an IPO — his most detailed plan for the separation of the two companies since he began his unsolicited campaign in January.

Under Icahn’s plan, eBay and PayPal would join in a commercial agreement to keep working together, while selling off minority ownership of PayPal in the public markets. Such a move, in Icahn’s opinion, would let PayPal use its own stock to complete acquisitions and attract talent while providing investors with a clearer understanding of each company’s value.

In an interview with Re/code in January, eBay CEO John Donahoe said that commercial agreements required to maintain a relationship between the two companies in such a spinoff would likely negatively impact the profitability of PayPal.

“Whether it’s PayPal’s integration on eBay, whether it’s signing up new users, or using data, you’d have to find arms-length pricing on all of those, which would obviously have an impact,” he said.