|By PR Newswire||
|March 12, 2014 12:44 PM EDT||
NEW YORK, March 12, 2014 /PRNewswire/ -- Today Carl C. Icahn released the following open letter to stockholders of eBay Inc.:
I believe that the Skype affair, only some of the sordid details of which we recently exposed, represents a complete and utter breakdown in the system of checks and balances that a properly functioning board should provide. Without a strong and independent board that rejects cronyism and is willing to hold management accountable, I believe that eBay stockholders may again suffer a travesty even worse than what was visited upon them when Skype was sold prematurely and $4 billion of upside was lost. I believe strongly that stockholders should vote for our nominees because eBay cries out, like no other company I have ever seen before in my many years on Wall Street, for owner representatives on the board who will act as watchdogs. In my opinion, if this board and management have nothing to hide, then they should have absolutely no objection to having new blood in the boardroom.
By the same token, I believe that if nothing untoward went on with the sale of Skype, and if eBay, CEO John Donahoe, director Marc Andreessen and Chairman and founder Pierre Omidyar truly believe, as they have proclaimed (though not, I believe significantly, under oath), that my claims are "false and misleading," then the board should have absolutely no reason not to respond to the books and records demand we have submitted pursuant to our right as stockholders under Delaware law in a manner that will permit ALL stockholders to see every page of the documentary evidence. Thus far, the company has offered to show us only certain limited amounts of material responding to our inquiries – and has insisted that all documents produced must be subject to confidentiality restrictions. Why, if there is nothing to hide, would records relating to a 5-year old transaction not be permitted to be shared with ALL stockholders?
We are not confident, based on John Donahoe's recent interview with the Financial Times - in which he lamented the fact that he had stockholders to answer to – that the truth will be forthcoming without the threat of legal process – which is why we continue to press our books and records demand pursuant to Delaware law. The Financial Times article states: "Mr. Donahoe says that his business should be allowed to innovate without shareholder distractions." And the article quotes Mr. Donahoe as saying: "Every new Silicon Valley company has a dual class of stock to prevent this issue, because innovation has a long-term time horizon." In any rational world, dual class stock, which is an outrageous scam, would be illegal for public companies. But more importantly, John Donahoe misses the point entirely because the "shareholder distraction" here involves the premature sale of Skype – not innovation with a long-term time horizon. Even more importantly, to me, this attitude of apparent disdain for the rights of the owners of the company (which may be summed up as – "Being a CEO of a public company would be a great job, were it not for those pesky shareholders") goes a long way toward explaining why the full story of what really happened with Skype seems to us to continue to remain shrouded in the type of fog and mystery often engineered by highly paid public relations consultants and lawyers, the kind of folks who invent undemocratic entrenchment devices like dual class stock so that companies can take stockholder money and then tell them to "sit down and shut up." It seems to me that we do not know the full story of Skype yet because this board does not believe it should have to explain its failures to the stockholders, who instead should remain silent and be grateful for whatever crumbs we get.
MESSAGE TO EBAY'S BOARD: THESE TYPES OF SHENANIGANS MAY FLY IN COUNTRIES WHERE DECISIONS AFFECTING MILLIONS OF PEOPLE'S LIVES ARE MADE IN SECRET POLITBURO MEETINGS. BUT I BELIEVE ONE OF THE THINGS WHICH MAKES OUR COUNTRY THE GREATEST ON EARTH IS OUR DEMOCRATIC FORM OF GOVERNMENT, WHERE DELIBERATIONS ARE CONDUCTED IN THE LIGHT OF DAY AND OUR LEADERS ARE ACCOUNTABLE TO THE PEOPLE. LEGISLATION SUCH AS THE FREEDOM OF INFORMATION ACT ENSURES THAT NOTHING STAYS BURIED FOR LONG. THE WORDS OF JUSTICE LOUIS BRANDEIS ARE JUST AS RELEVANT TODAY AS THEY WERE IN 1913: "PUBLICITY IS JUSTLY COMMENDED AS A REMEDY FOR SOCIAL AND INDUSTRIAL DISEASES. SUNLIGHT IS SAID TO BE THE BEST OF DISINFECTANTS; ELECTRIC LIGHT THE MOST EFFICIENT POLICEMAN."
eBay's board has stated that our director nominees are "not qualified candidates." What makes one qualified in their opinion? Being a large stockholder of a direct competitor and interfering, as alleged by the Department of Justice, with eBay's hiring practices on behalf of said direct competitor (current board nominee, Scott Cook)? Participating in a consortium that buys assets from the company and flips them for a quick and massive profit (current board member, Marc Andreessen)? Failing, as alleged by the SEC, to take steps to ensure that the accounting for stock options was proper and agreeing to disgorgement and civil penalties amounting to over $3.5 million (current board nominee, Fred Anderson)? I have heard nothing of value from John Donahoe or the board in response to our various criticisms – just buzz words and consultant speak, as if repeating the mantra "world class" enough times will make it so. I believe that our nominees look mighty attractive when contrasted with these specimens.
Over the years, many individuals (including myself) whom we have succeeded in placing on boards through proxy contests have routinely been asked to remain on those boards for multiple terms due to the cooperative and congenial manner with which they comport themselves in the boardroom with their fellow fiduciaries. And I believe it is extremely difficult for one to argue that our strategy of obtaining board representation with the goal of restoring a sense of accountability in the corporate suite (which we attempt to employ not only in our investing activities but also in the management of our controlled operating companies) has not been successful. From the beginning of 2000 through the end of last year, the trading price of the stock of my holding company, Icahn Enterprises L.P., increased 1,662%, as compared to 64% for the S&P 500 Index over the same period. It is often the case that only one fresh voice in the boardroom, though he or she may be outvoted in terms of sheer numbers, is all it takes to end years of undue deference to management.
I have been so successful with companies over the years because I have brought in the right CEO. Sometimes convincing boards to make changes takes years, but when change ultimately comes the results are often startlingly good. In just the last year, simply examine our successes at Forest Laboratories and Chesapeake Energy. We believe that at the very least, eBay stockholders must send Donahoe and the board a message that we are very unhappy with the current situation at eBay. In addition to the egregious issues surrounding the Skype transaction, it should also be noted that in just the past year eBay has underperformed its peers. Indeed, from January 1, 2013 through our initial involvement on January 10, 2014, Amazon, Visa and MasterCard returned 60%, 48% and 73%, respectively, while eBay stock returned only 2%.
In our opinion, eBay and PayPal should immediately be separated. It is my firm belief that if this occurred, there would be a number of bidders willing to pay a large premium for an independent PayPal. However, on the other hand, I fear that if left under the management of eBay it will "wither" (as Elon Musk said). I believe that if it is left as a division of eBay, PayPal may well go the way of other former technology greats such as Blackberry, Dell, Eastman Kodak, Polaroid, Nintendo, Xerox, Sony, Palm, and AOL – the same way that Motorola Mobility may have gone had we not been able to convince Motorola's board to bring in a new CEO and separate the companies – ultimately resulting in a sale to Google.
Sadly in our opinion and the opinion of others eBay does not have years to wait. PayPal is a great company, but it is going to war against strong adversaries such as Google, Apple, Visa, etc. To win a war, you need to have great generals that have proven their competence and loyalty. Unfortunately, it is obvious to us that this is lacking at eBay and PayPal. PayPal must be separated NOW so that great management can be attracted – management that can make the right decision and know when to sell at the right time, not the worst time.
Stockholders, please stay tuned. We are looking forward to sharing with you our business rationale for separating PayPal from eBay. Thank you for your continued support.
Carl C. Icahn
Follow me on twitter: @Carl_C_Icahn
If you have questions or need assistance in voting your shares, please call:
480 Washington Blvd, 26th Floor
Jersey City, NJ 07310
(Toll Free) (888) 497-9677
E-mail: [email protected]
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 PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A FILED BY CARL C. ICAHN WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 11, 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.
 See Ed Hammond et al., Ebay chief defends keeping PayPal, The Financial Times, March 6, 2014 [emphasis added].
 Louis D. Brandeis, "What Publicity Can Do," Harper's Weekly, December 20, 1913.
SOURCE Carl C. Icahn
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
Jan. 17, 2017 04:15 PM EST Reads: 1,952
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jan. 17, 2017 03:30 PM EST Reads: 5,307
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, John Jelinek IV, a web developer at Linux Academy, will discuss why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers...
Jan. 17, 2017 03:26 PM EST Reads: 198
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
Jan. 17, 2017 02:45 PM EST Reads: 4,088
SYS-CON Events announced today that Catchpoint, a leading digital experience intelligence company, has been named “Silver Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Catchpoint Systems is a leading Digital Performance Analytics company that provides unparalleled insight into your customer-critical services to help you consistently deliver an amazing customer experience. Designed for digital business, C...
Jan. 17, 2017 02:30 PM EST Reads: 1,727
"We formed Formation several years ago to really address the need for bring complete modernization and software-defined storage to the more classic private cloud marketplace," stated Mark Lewis, Chairman and CEO of Formation Data Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jan. 17, 2017 02:15 PM EST Reads: 6,308
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Jan. 17, 2017 02:15 PM EST Reads: 3,622
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Jan. 17, 2017 02:15 PM EST Reads: 3,343
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Jan. 17, 2017 02:00 PM EST Reads: 5,350
Updating DevOps to the latest production data slows down your development cycle. Probably it is due to slow, inefficient conventional storage and associated copy data management practices. In his session at @DevOpsSummit at 20th Cloud Expo, Dhiraj Sehgal, in Product and Solution at Tintri, will talk about DevOps and cloud-focused storage to update hundreds of child VMs (different flavors) with updates from a master VM in minutes, saving hours or even days in each development cycle. He will also...
Jan. 17, 2017 02:00 PM EST Reads: 1,059
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
Jan. 17, 2017 01:45 PM EST Reads: 799
A look across the tech landscape at the disruptive technologies that are increasing in prominence and speculate as to which will be most impactful for communications – namely, AI and Cloud Computing. In his session at 20th Cloud Expo, Curtis Peterson, VP of Operations at RingCentral, will highlight the current challenges of these transformative technologies and share strategies for preparing your organization for these changes. This “view from the top” will outline the latest trends and developm...
Jan. 17, 2017 01:45 PM EST Reads: 909
Things are changing so quickly in IoT that it would take a wizard to predict which ecosystem will gain the most traction. In order for IoT to reach its potential, smart devices must be able to work together. Today, there are a slew of interoperability standards being promoted by big names to make this happen: HomeKit, Brillo and Alljoyn. In his session at @ThingsExpo, Adam Justice, vice president and general manager of Grid Connect, will review what happens when smart devices don’t work togethe...
Jan. 17, 2017 01:45 PM EST Reads: 207
“RackN is a software company and we take how a hybrid infrastructure scenario, which consists of clouds, virtualization, traditional data center technologies - how to make them all work together seamlessly from an operational perspective,” stated Dan Choquette, Founder of RackN, in this SYS-CON.tv interview at @DevOpsSummit at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jan. 17, 2017 01:15 PM EST Reads: 3,511
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
Jan. 17, 2017 12:45 PM EST Reads: 5,530