Carl Icahn an American businessmen, investor and a shareholder invested an amount worth of $25 million in eBay Inc. to include 446,000 shares of e-commerce giant company to his portfolio.
Earlier last year, eBay rejected Mr. Cahn recommendation in its initial public offering to spin-off its digital payment system PayPal.
According to Carl, PayPal and eBay Inc (NASDAQ:EBAY) shadows their distinct market worth. He said, the decision to spinoff will broaden the company equity holder’s base and will help the company to be more competitive in the long run. Moreover, companies should have separate management teams, therefore removing the possibility for any disparity between the businesses.
eBay did not act upon his proposal as it assumed that there will have no additional advantage for both the businesses if Icahn’s suggestion was met. Instead, eBay an PayPal together can generate more benefits for the shareholders.
However in September, company decided to divide itself into two businesses, by spinning off its digital payment system PayPal by the end of 2015.
This move will be a good chance for fresh and current shareholders to acquire shares in a new business, which is expected to grow strongly right now.
As everything is going in the direction that Icahn has wished for, this might be one of the reason of his bullish approach on the company.
On 21st January, eBay Inc posted its fourth quarter earnings report. Company reported earnings of $0.81 beating analyst’s estimation of $0.77 cents. Company also posted revenue of $4.92 billion missing analyst forecast of $4.97 billion, even though it missed the estimations the gross revenue increased by 13% successively.
eBay is undergoing a structural change, taking great steps to attract big sellers and expanding its customer base. Furthermore, the company is moving to a fixed price format and looking to enhance technology and navigation of its properties. They are looking to deploy their funds in better opportunities by making mobile users their top priority.
Company is expecting a long term growth in earnings of 12.73%. Company is providing an interesting option for the investor as it is providing a short term movement, followed by an upward revision in estimate.
According to the article, company is showing a positive trend in terms of growth. Estimates have gone up by 2.34%, from $2.56 to $2.62. the stock is currently trading at $58.54, showing an upside of 0.33% with 30 day moving mean volume of 9.20 million shares.