Carl Icahn: eBay, PayPal Should Still Be Separated

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April 10 (Bloomberg) -- Activist investor Carl Icahn talks with Trish Regan about the agreement he reached with Ebay to end an acrimonious four-month disagreement over whether to split off the PayPal unit on Bloomberg Television’s "Bottom Line."

Follows developed in ukraine and russia.

We begin with trish regan.

The few that at ebay comes to an end.

I'm joined right now by mr.

Carl icahn himself.

I was a bit surprised when i got this news because i know you have had some pretty choice words for management and some of those board members.

It now, it seems as though you are coming to an agreement.

What made you change your mind?

I look at all of these pieces.

If you look back at our record, when we got on board over the five years, all you had to do was buy the stock and you did great and we got confidentiality . we did terrific on those.

On an annualized basis, if you just bought the stock when we did get on the board -- i know you wanted to see paypal being spun off.

Are you going to continue to push for that?

I have said -- we believe that paypal -- that ebay should eventually be separated.

After talking to john in setting this company, i think there is such a huge potential in paypal right now that it's almost a mistake to do it right now.

I agree because, why shouldn't they sell stock now when you believe it's going to increase dramatically over the next few years?

Paypal is a bit -- i like to call them no-brainers.

It's a little similar to what we said with netflix.

You said spinning off paypal was a no-brainer.

What exactly made you change your mind here?

Several weeks ago, you had not spoken to the ceo.

It seems you did have a conversation with them.

How did that come about and why does?

You have asked similar questions.

-- asked so many questions.

To begin with what we talked a lot.

They have lived with this company for a number of years.

A lot of them don't want to see it split up for the following reason -- a few of them have a feeling that at this point in time, why split it up?

They believe -- we are not short-term investors.

7-10 years is the new mantra.

The reason they don't want to do it is they feel that paypal will be taken away from them.

A some big acquirer will come in and pay the premium.

They are not interested.

This thing has so much potential, why do it now?

I think, i'm not speaking for john donahoe, but i think he also has that same thought.

This company is really cheap now.

When you dig into it, i can't grasp that thinking.

Let's spin it off -- you don't have to do it now.

I believe the question is not if it's going to be done, but when.

I don't think -- if you know you want when, why fight the war?

Did you know you weren't going to win?

First of all, you have the chairman voting with eight percent.

They have great belief in this company and the potential and i don't think they would have voted for me.

I might have won a seat on the board but i would not have won the preparatory anyway.

It is easy to change her mind when you are not going to win.

-- change your mind when you are not going to win.

I want to make it clear, i don't say i would not have won a seat on the board.

I say that strongly.

I do not believe i could have won the preparatory anyway, so it's easy to change your mind on that.

I do think the company will be spun off eventually.

I still believe it should be.

I don't think there is a rush to do it.

We going to stay into the stock until it spins off?

I do stay a long time with companies.

I really think this company is greatly undervalued.

I have said it the other companies i'm in.

I believe apple is undervalued.

I think this company is very undervalued.

You can deduce from that that i will not be selling it.

I might be buying it.

David dorman is the independent director that has been named to the board.

How can he become switzerland here?

I have said this before -- i was having a conversation with -- we were talking about some other business.

He brought up the fact, he said, he is a smart guy.

Why don't you start talking?

I would love to talk but he never reached out to us.

You don't like to make the first move in these things.

I was not sure that john wanted to talk.

He said, let me call him.

He called john who said, yeah, great, let's discuss this.

We came up with this idea that, ok, why don't you put a third guy on?

That appealed to me.

Maybe i would -- i thought i might win a seat.

They agreed they would give me a confidentiality.

I mentioned a david dorman -- he saved motorola.

I think he would be a great director.

They like him.

I called dave and had a conversation and he agreed to be part of that confidentiality.

I do think john -- i'm locked in.

I'm not a short-termer.

You can only buy and sell occasionally.

You have longer restrictions.

Jimmy is a good guy.

Talking to a lot of analysts, they thought john was an effective guy.

John and i must have talked over the days 48-10for 8-10 hours about the company.

It was interesting -- not everyone is so outspoken against you.

This particular ceo came out and was on the program with me and he came out swinging.

The company came out swinging, firing back at you.

Did that have.

Anything to do with your decision?

Was on that program with you a long time ago.

I don't even remember that program.

I did watch it.

I don't even remember what he said.

Those board members were out there fighting back.

Did that have any influence?

That had nothing to do with it.

First and foremost, i want to make money for the company.

This is the best way to do it.

I don't think anything has changed dramatically about my views.

I can't speak for john -- let me ask you about an op-ed in the paper the other day.

You had the founders saying that activists are a group of bullies that relish a fight.

It would on to say, it is reminiscent of joe mccarthy hiding behind patriotism to inflame the communist scare.

What do you say?

You are being a bit unfair about that article because i did read it.

They said some wonderful things about us.

They were talking about activists doing something -- it was the day before we did this.

We were talking about motorola and how we helped saved motorola.

It went both ways.

I can't argue that there are some activists that are short-termers.

That doesn't mean that all of them want to bully.

I don't think they are speaking necessarily about one or two activists here.

If you look at us, we have made hundreds of billions of dollars for shareholders.

How can you say that we just look out for ourselves?

Yes, i would argue that they are wrong about that.

I can't argue specifics.

They also said -- i read it carefully -- they also said that large shareholders, index funds should not be that passive.

They should be much more involved.

They said the analyst community -- they were calling on every one to be more active.

You have been very active in a company we have followed quite closely.

Hlf -- bill ackman says he is not going to stop until the companies out of business.

He has seen some success in terms of getting the fcc to take a look at this company.

They launched an investigation.

What is the latest on that?

I know you have three board members and have stayed inv olved in this company.

We went up to five board members just recently.

We are involved because we like it.

I have said all along that they got this completely wrong.

This company is undervalued.

Herbalife gives jobs to people.

It is absurd what ackman is saying.

His whole piecethesis is completely wrong.

There are things he says that defy -- there are some of these distributors that might be promising stuff, but that's not herbalife promising.

They have done a great deal to change that.

Even where they go in and say, we don't want you to sell leads.

That doesn't mean herbalife itself is not a very exciting company.

It is in a market that gives jobs.

The opposite of what ackman says.

They give jobs to a lot of hispanics.

I can't even understand his arguments.

Read it if you want to.

I think i'm the only guy who loves to read the first report -- ackman was -- he may believe what he is saying.

I don't know.

I'm not mad at ackman anymore.

I made $300 million because of

This text has been automatically generated. It may not be 100% accurate.


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