EBay Inc.'s stock price rose as much as 6.8 percent today after The Information reported the company could spin off its payment unit as soon as next year.
The world's biggest online marketplace has been telling potential candidates for the top position at its PayPal unit that it's considering spinning off the division as soon as next year, The Information said in an Aug. 21 report. The shares of EBay rose 4.9 percent to $56.03 at 11:01 a.m. in New York.
The report follows activist shareholder Carl Icahn's push earlier this year for eBay to spin off PayPal. The parties settled in April and eBay agreed to add an independent director. The San Jose, Calif.-based company also took a tax charge to let it repatriate foreign earnings, although it hasn't specified any plans for the money. The payments unit is fueling growth at eBay, with PayPal revenue up 20 percent in the latest quarter, compared with a 9 percent in gain the marketplaces business.
"The eBay Inc. board and management team remain focused on maximizing shareholder value,"Amanda Miller, a spokeswoman for eBay, said in an e-mailed statement. "As we discussed during proxy season and in our second-quarter financial results call, the board will continue to assess all alternatives to create that long term value and to enhance the growth and competitive positions of both eBay and PayPal. This position has not changed."
EBay Chief Executive Officer John Donahoe has repeatedly said PayPal and the marketplaces business are stronger together than separate."We are blessed with two great businesses and will continue to aggressively drive growth for PayPal and EBay," Donahoe said during a call with analysts last month. "We and our board will remain objective and open-minded in assessing alternatives which we continue to do. We will make decisions that maximize long-term shareholder value, and we will do what's best for PayPal and eBay to enhance their growth and competitive positions."