eBay Inc. (NASDAQ:EBAY): Activist Investor Carl Icahn Initiated New Position – NFLX, HLF


Dallas, Texas 05/29/2014 (FINANCIALSTRENDS) – Activist investor Carl Icahn ended the proxy war with eBay Inc. (NASDAQ:EBAY) and agreed to withdraw his proposal seeking separation of PayPal business from eBay as well as nomination of two of his employees to the eBay’s Board of Directors. However, Icahn still continues to believe that spin-off of PayPal from eBay would benefit to unlock the true value of PayPal business and will continue to pursue this rationale to the eBay management through confidential discussions.

Icahn’s New Investments

Market Realist reported that Carl Icahn’s Icahn Associates added a large new position in eBay Inc. (NASDAQ:EBAY) during the first quarter of 2014 which accounts for approximately 4.66% of his U.S. long portfolio and 0.82% stake in the company, third highest holding by any hedge fund in eBay. Icahn Associates reduced their holding in Netflix, Inc. (NASDAQ:NFLX) and increased the stake in Herbalife Ltd. (NYSE:HLF) and Apple Inc. (NASDAQ:AAPL) during the same quarter

Other hedge funds holding significant stake in the e-commerce company include Magellan Asset Management Ltd. which holds 19.22 million shares of eBay which accounts for 1.49% stake in the company followed by Discovery Capital Management LLC holding 12.72 million shares or 0.98% stake in the company.

The Threats and the Downfall

eBay Inc. (NASDAQ:EBAY)’s stock has been witnessing downfall since it reported 1Q14 results, primarily because of a substantial tax rate of 366% during the quarter coupled with lower than expected outlook. These factors subsided 14% year over year growth in the company’s quarterly revenue which was also better than Wall Street’s expectations by $0.03 billion. In addition, a security flaw uncovered in the company’s website with alleged hacking and theft of personal details of more than 230 million users, further triggered the downfall. Moreover, the competitions are also expected to increase in its payment service business with potential reporting of Apple Inc. (NASDAQ:AAPL) planning to enter the segment.

Stock Update

On Wednesday, the stock of eBay Inc. lost 2.67% and closed at $50.39.