eBay’s damage control following Icahn’s accusations

eBay and billionaire investor Carl Icahn are engaging in a public war of words that was ignited by an open letter Icahn sent to eBay shareholders Monday, Feb. 24. In the letter, Icahn accused eBay CEO John Donahoe of ignoring conflicts of interest on its board and called for the company to spin off PayPal.

Icahn also disclosed he now owns 2.15% of eBay’s stock. The letter specifically alleged that board member Marc Andreesseen has personally gained by purchasing large stakes in former eBay subsidiaries and advised and invested in direct eBay competitors Boku, Coinbase, Dwolla, Jumio and Fab.

Icahn also claimed that Andreesseen was part of an investor group that purchased Skype from eBay for far less than eBay paid and then sold it at substantial profit to Microsoft 18 months later, and that Andreesseen gained from investing in online shopping platform Kynetic, which eBay sold back to its founders at a low price in 2011. As for Intuit founder and board member Cook, Icahn’s letter said Intuit is a direct competitor of PayPal because of its Go-Payment service. He called upon the entire eBay board to resign immediately, and said he will present a slate of candidates for eBay’s upcoming board of directors election.

In a press release dated Feb. 24, eBay responded to Icahn’s letter by saying it cherry-picked old news clips and anecdotes and presented them out of context. eBay also reiterated that it has determined its shareholders would be best served by keeping PayPal part of eBay and refuted all allegations of misconduct or incompetence against Andreesseen, Cook and Donahoe.