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Company earnings helped boost the stock, as the e-commerce company reported earnings of $0.81 per share, just beating analysts' estimates of $0.80. Revenue of $4.53 billion was an increase of 13% from last year.
eBay also announced Wednesday that it had authorized a $5 billion share buyback program.
But here's why that rally will be short-lived if the company listens to Carl Icahn…
Carl Icahn's eBay Plan
Activist investor Carl Icahn called for eBay to split from its popular payment unit PayPal.
In its earnings press release, eBay reported that Icahn had submitted a proposal for PayPal to spin off into its own company. Icahn also nominated two of his employees to the "spinoff" company's board of directors.
After eBay made the proposal public, Icahn stated that he owned 0.82% of eBay's shares outstanding.
While eBay officials politely stated that they take the opinions of all their shareholders into account, they certainly didn't sound thrilled with Icahn's proposal.
"We believe that our collection of assets drive more growth and more success together, than apart," eBay CEO John Donahoe said. "The eBay marketplace accelerates PayPal's success; the eBay marketplace provides data that makes PayPal smarter."
PayPal is the fastest-growing part of eBay's business, having posted sales growth of 19% last quarter. That's compared to 12% growth for eBay's traditional "marketplace" division.
The marketplace is still the cash cow for eBay, as it accounted for $2.4 billion in profit through the first nine months of 2013. PayPal accounted for $1.1 billion during that period.
It's clear that eBay officials, particularly Donahoe, don't agree with Icahn's plan for the future of eBay and PayPal.
Activist investors like Icahn frequently scoop up large quantities of a company's stock and make demands that would theoretically benefit shareholders. Share buyback programs and sell-offs are typical requests.
But there's a problem…