- Hedge fund Elliott Management believes Walmart, Google or private equity would make sense as potential buyers for eBay's marketplace business, according to a person familiar with the matter.
- stake in eBay today
- Elliott is calling for eBay to sell or sell its classifieds business.
Activist hedge fund Elliott Management thinks Walmart, Google or several private equity firms are interested in eBay's marketplace business if it sheds StubHub and eBay Classifieds Group, according to a person familiar with the matter.
Elliott published it owns more than 4 percent of eBay in a letter Tuesday, which also outlined recommendations for the company, including spinning off StubHub and eBay's portfolio classified advertising properties. Activist hedge fund Starboard Value LP also has taken a position in eBay and plans to speak to the company about similar changes, said another person familiar with the matter.
EBay has a market valuation of more than $ 31
Elliott projects the Classifieds could sell for between $ 8 billion and $ 12 billion and estimates StubHub could fetch between $ 3.5 billion and $ 4.5 billion. If EBay sells the marketplace business without operational improvements, it could fetch about $ 15 billion, one of the people said.
Founded in 1995 before the first dot-com boom, eBay was once the mecca or online e-commerce but has long since handed that mantle over to Amazon. Elliott said the company's share price could reach more than $ 63 a share by 2020 if it follows its plan to focus on the "deeply undervalued" marketplace business.
Spokespeople for Google and Walmart didn't immediately respond to requests for comment. eBay responded to the Elliott letter in a statement, saying the company appreciates "Elliott's recognition of strength and power of eBay's business and will carefully review and evaluate Elliott's proposals." EBay has steadily grown revenue since splitting off PayPal in 2015. Still, they are about flat compared to where they were two years ago. The S&P 500 is about 15 percent over the same time period.
EBay set up a proxy fight with activist investor Carl Icahn in 2014 after he called for the company to spin off PayPal. The company ended up taking Icahn's advice about a year later.
Ebay shares are up to 6 percent on the news of the Elliott stake in late Tuesday trading, down the day for most of the rest of the tech market. | Africa, and CNBC World, CNBC is the world leader in business news and provides real-time financial market coverage and business information 410 million homes worldwide, including more than 90 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours of business programming in North America (weekdays from 4:00 am – 7:00 pm ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News agencies worldwide. CNBC features a mix of new reality programming, CNBC's highly-successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.
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