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Carl Icahn is holding nothing back in his battle to force eBay Inc. (Nasdaq: EBAY) to spin off its PayPal payment processing business.
On the same day eBay rejected two of Icahn's nominees for its board, the billionaire activist investor fired off another open letter to the company's stockholders berating Chief Executive Officer John J. Donahoe's handling of the Skype deal.
"We believe based on evidence we've uncovered that Donahoe's inexcusable incompetence cost eBay stockholders over $4 billion," the letter begins.
Icahn holds a 2.2% stake in eBay. In a fight that started in January, Icahn has sought to convince eBay to split PayPal off as a separate company, arguing that PayPal needs better management to face challenges from the likes of Google Inc. (Nasdaq: GOOG) and Apple Inc. (Nasdaq: AAPL).
In making that case, Icahn has launched a series of attacks on Donahoe.
In the letter released today (Monday), Icahn alleges that Donahoe bungled the Skype deal by selling it to a group led by Marc Andreessen - an eBay board member - for only $1.9 billion. Just 18 months later, Andreessen's group sold Skype to Microsoft Corp. (Nasdaq: MSFT) for $8.5 billion.
Icahn says that Microsoft had approached eBay about buying Skype back in 2009, but was wary of a licensing dispute. Andreessen resolved the dispute and pocketed a huge profit.
"Why didn't Donahoe, who allegedly also had the information that would be key to reaching a settlement with Skype's founders, settle it for eBay and sell Skype directly to Microsoft, thereby keeping the extra $4 billion for eBay stockholders?" Icahn wrote.
Icahn was also rankled by eBay's rejection of his nominees this morning.
eBay said it had given Icahn's candidates "serious consideration," but that neither are qualified.
In responding to Icahn's letter, eBay said that Donahoe had "delivered astounding results for eBay shareholders." The company added that Icahn's statements were "false and misleading" and made "in pursuit of his own profit motives."
Certainly, Carl Icahn's involvement in eBay has had an impact...
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.
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