Click here to close now.




















Welcome!

News Feed Item

Carl C. Icahn Issues Open Letter To eBay Stockholders

NEW YORK, Feb. 26, 2014 /PRNewswire/ -- Today Carl C. Icahn released the following open letter to stockholders of eBay Inc.

In our February 24, 2014 letter to eBay stockholders,(1) we raised what we consider to be serious and direct questions regarding corporate governance at eBay, with particular focus on the conduct of CEO John Donahoe and directors Marc Andreessen and Scott Cook.

In its reply to our letter, eBay seeks to simply cast aside these matters as "cherry picked old news clips"(2) and informs us that Mr. Andreessen and Mr. Cook are "two of the most respected, accomplished and value-driven technology leaders in Silicon Valley."(2)  There is no question that they are accomplished and value-driven, but we believe the primary problem, among other things, is that they appear to be value-driven for themselves, personally profiting while costing eBay stockholders at least $4 billion.

Message to the eBay BoardCorporate Governance Failures Do Not Have A Shelf-LifeThe simple and, to us, disturbing fact is that eBay sold a controlling stake in Skype to a sitting board member (Mr. Andreessen) and Silver Lake, for about $1.9 billion.  A mere 18 months later, that board member sold Skype to Microsoft for $8.5 billion,(4) thereby netting a $4 billion gain for himself and Silver Lake that should have accrued to eBay stockholders.  Whether this occurred 2, 5 or 10 years ago is irrelevant, especially when that board member is still on the board!  The phenomenal payday for Mr. Andreessen and Silver Lake raises serious red flags.  It is therefore particularly galling that management continues to hold this transaction out as an example of the board acting "objectively."(5)  Further, from where we sit, the fact that a similar set of circumstances happened again in the case of Mr. Andreessen's investment in Kynetic, which netted $150 million in paper profits for Mr. Andreessen,(6,7,8) shows a troubling pattern at eBay. 

Why is Mr. Cook still on the board of eBay?  In our letter we questioned whether Mr. Cook should remain on the eBay board since Intuit (a company in which Mr. Cook owns nearly $1 billion in stock) and PayPal are fierce competitors.  eBay replied that the overlap between Intuit and PayPal is small and disclosed, but this response misses what matters most, which is that both company's share the same long-term common strategic goal to build strong payment processing businesses.  eBay's recent $800 million acquisition of Braintree(6) highlights the company's commitment to credit card "processing", an area in which Intuit is a direct competitor.  "PayPal Here", an identical product to Intuit's "GoPayment", was released to significant fanfare in the marketplace.(7,8)  These products compete directly.  Is it good for PayPal to have a competitor in the board room gaining insights into its operations, product pipeline and proprietary technologies?  We believe that Mr. Cook's participation in strategic discussions on both sides of the table will continue to present challenges for eBay and will eventually, if it has not happened already, become a major strategic disadvantage for eBay.

Stockholders:  Please ask yourself: If you ran your own company, would you ever allow your competitors to sit at the table as you planned and executed your business strategy?  We believe the obvious answer is NO!

We believe corporate governance at eBay is dysfunctional.  Let's end this charade.  We hope you will VOTE FOR OUR SLATE OF DIRECTORS and afford us the opportunity to represent and serve ALL eBay stockholders as members of the eBay Board.   We also urge you to vote in favor of our precatory proposal in order to send a clear message to the eBay Board that eBay and PayPal must be separated – NOW

IN THE COMING WEEKS WE WILL LAY OUT THE FULL DETAILED BUSINESS CASE TO SUPPORT THIS SEPARATION, WHICH HAS ALREADY RECEIVED STRONG SUPPORT BY KNOWLEDGEABLE AND AUTHORITATIVE INDUSTRY COMMENTATORS.  WE APPRECIATE ALL OF THE SUPPORT WE HAVE RECEIVED FROM OUR FELLOW STOCKHOLDERS AS WE COLLECTIVELY STAND UP TO MR. DONAHOE AND THIS BOARD

Sincerely,

Carl C. Icahn

*****

1      Icahn, Carl C.  Shareholders Square Table.  Open Letter to eBay Stockholders.  February 24, 2014.  Available at http://www.shareholderssquaretable.com/open-letter-to-ebay-stockholders/

2      eBay Inc. Responds to Carl Icahn's Feb. 24 Open Letter to Shareholders.  February 24, 2014.  Available at http://investor.ebayinc.com/financial_releases.cfm

3      Lyons, Dan. The Daily Beast. Microsoft Buys Skype: Marc Andreessen on the Sale. May 10, 2011. Available at http://www.thedailybeast.com/articles/2011/05/10/microsoft-buys-skype-marc-andreessen-on-the-sale.html

4      Rusli, Evelyn.  New York Times DealBook.  Skype Investors Reap Windfall in Deal with Microsoft.  May 10, 2011.  Available at http://dealbook.nytimes.com/2011/05/10/skype-investors-reap-windfall-in-microsoft-deal/2 Reese, Brad.  Network World.  Skype is on its Way to Becoming One of the Most Important Companies in the World Am I the Only One Amazed that eBay is Selling Skype to a Sitting Member of eBay's Board of Directors?. September 9, 2009.  Available at http://www.networkworld.com/community/node/45217

5      Faber, David and Cramer, Jim.  CNBC.  John Donahoe, eBay President & CEO, Speaks with CNBC's "Squawk on the Street".  January 23, 2014.  Available at http://www.cnbc.com/id/101359025

6      Rao, Leena.  Techcrunch.  eBay's PayPal Acquires Payments Gateway Braintree for $800M in Cash.  September 26, 2013.  Available at http://techcrunch.com/2013/09/26/paypal-acquires-payments-gateway-braintree-for-800m-in-cash/

7      Introducing PayPal Here: The Future of Commerce for Small Business.  March 15, 2012.  Available at  http://blog.ebay.com/paypal-here/

8      Essers, Loek.  Computerworld.  PayPal to Introduce Mobile Chip-and-PIN Payments Service in Europe.  February 22, 2013.  Available at http://www.computerworld.com/s/article/9237048/PayPal_to_introduce_mobile_chip_and_PIN_payments_service_in_Europe

*****

THIS LETTER INCLUDES INFORMATION BASED ON DATA FOUND IN FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INDEPENDENT INDUSTRY PUBLICATIONS AND OTHER SOURCES. ALTHOUGH WE BELIEVE THAT THE DATA IS RELIABLE, WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS PRESENTATION. MANY OF THE STATEMENTS IN THIS PRESENTATION REFLECT OUR SUBJECTIVE BELIEF.

SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY Carl C. Icahn AND HIS AFFILIATES FROM THE STOCKHOLDERS OF EBAY INC. WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF EBAY INC. AND WILL ALSO BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION IS CONTAINED IN THE SCHEDULE 14A FILED BY CARL C. ICAHN WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 24, 2014 (THE "SCHEDULE 14A"). EXCEPT AS OTHERWISE DISCLOSED IN THE SCHEDULE 14A, THE PARTICIPANTS HAVE NO INTEREST IN EBAY INC. OTHER THAN THROUGH THE BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK OF EBAY INC. AS DISCLOSED IN THE SCHEDULE 14A.

SOURCE Carl C. Icahn

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect t...
"Our biggest growth area has been the security services, the managed services - the things that differentiate us in the market that there is no client that's too small and there's no client that's too big," explained Paul Mazzucco, Chief Security Officer at TierPoint, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Countless business models have spawned from the IaaS industry. Resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his General Session at 16th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, broke down what we've got to work with and discuss the benefits and pitfalls to discover how we can best use them to d...
Containers are changing the security landscape for software development and deployment. As with any security solutions, security approaches that work for developers, operations personnel and security professionals is a requirement. In his session at DevOps Summit, Kevin Gilpin, CTO and Co-Founder of Conjur, will discuss various security considerations for container-based infrastructure and related DevOps workflows.
"We do data integration for B2B also application to application, and we do data management and enable Big Data," explained Pat Adamiak, Vice President, Product Marketing at Liaison Technologies, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
The Cloud industry has moved from being more than just being able to provide infrastructure and management services on the Cloud. Enter a new era of Cloud computing where monetization’s services through the Cloud are an essential piece of strategy to feed your organizations bottom-line, your revenue and Profitability. In their session at 16th Cloud Expo, Ermanno Bonifazi, CEO & Founder of Solgenia, and Ian Khan, Global Strategic Positioning & Brand Manager at Solgenia, discussed how to easily o...
"ProfitBricks was founded in 2010 and we are the painless cloud - and we are also the Infrastructure as a Service 2.0 company," noted Achim Weiss, Chief Executive Officer and Co-Founder of ProfitBricks, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...