Icahn Re-Writes Activist Playbook on eBay: Davidoff

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Feb. 28 (Bloomberg) -- Steven Davidoff, law professor at Ohio State University, examines billionaire investor Carl Icahn’s attempt to affect change at eBay and his claims of a conflict of interest by board members on Bloomberg Television’s “Market Makers.”

Latest letter to shareholders just about 30 minutes ago.

"i can resoundingly tell you i have never seen what looks to be such a blatant disregard for for douche area application to stockholders as i have seen at ebay.

The ebay board seems to be in a state of denial concerning what is -- has occurred under their watch or cope -- what has occurred under their watch." what do you make of that?

Well, this is carl.

What does that mean you go there is a well-worn activist playbook and then there's carl icahn playbook.

He is doing both right now.

One, he is under -- he is attacking the board, to say that they are underperforming.

That is questionable.

Ebay has been doing quite well.

And number two, he is advocating for a split off.

As i said, activism 101. split off a business must say the market is not valuing it right and then cash in on a quick valuation.

But is he wrong to be doing this?

You sort of say, well, this is carl icahn, but look at his track record.

Look at the great things he has done on the activist front.

Should we roll our eyes?

We should roll our eyes, but carl icahn is a genius.

He has a way of making money with companies, by either pushing the them to sell themselves, or break up and restructure.

And just because it is carl does not mean he does not have a point.

These are two separate businesses.

They have been brought together for a while.

The board stuff is just a distraction.

Carl icahn is trying to get these businesses to be separated and make a quick bucks.

That is what fascinates me about this particular case and carl icahn's role in it.

Of course, you're right, there is a well-worn activist labeled, and then there's the carl icahn playbook.

But doesn't seem as though carl icahn is taking things with every campaign a step further?

The idea, for example, that may be once you get to be a carl icahn and people listen to you because you are so loud and because you are good at broadcasting your voice, maybe they believe you know matter what you say, and a company like ebay is almost defenseless against the charges even if they are not true.

I think what is so interesting here, you have hit on it.

It is the clash of two cultures, which may be have both gotten away from themselves.

In the activist realm, we have the big egos, the carl icahn, the bill ackman, who can move markets with a tweaked.

It is a bit crazy and extreme, but it is what is going on right now.

At the same time, we have silicon valley, which is full of themselves.

A thing they can do no harm.

-- they think they can do no harm.

And frankie, you have directors like mark andreessen, who sit on boards everywhere, and you're not sure who is making money.

You know they are.

We are not sure shareholders are.

It is a clash of two big old church.

What do you think of carl icahn's accusations as it relates to mark andreessen?

In the last few months, mark andreessen has taken to twitter to talk about how much he likes and supports the point.

It going, which could be a real threat, mt.

Gox aside, to paypal.


gox aside, but let's be clear, when you have that many bitcoins is beer overnight, that is a problem.

Mark has invested in bitcoin very heavily.

Saying that mt.

Gox is just mf global is not very comforting from my perspective.

But it goes back to a bigger issue him a which is that mark is still at the center of silicon valley and has its tentacles in everything.

That is what carl icahn is attacking, cozy silicon valley ties.

Whether it is really in a shoe at ebay, we are not certain, but it is clear that there is a handful of people running silicon valley these days, and they are making money.

Whether shareholders are or not, i'm not sure.

Cozy boardrooms are nothing new in corporate america.

There have been previous generations of cozy ties.

Andreessen for his part says this, if i'm on a board and that public company is looking to buy company in a certain space, and one of my startups is in that space, i will not be a part of that conversation.

Historically, recusing yourself from such discussions was enough.

In this world, in the 21st century, and in particular silicon valley, is recusal enough?

Should a guy like mark andreessen faced with a quandary like this say, i cannot reliably, confidently serving the interests of shareholders, because my interests are so potentially conflicted i should just step off the board?

I think carl icahn is doing a very good job of making a very small issue a much bigger issue, which is skype.

Ebay sold skype.

It was criticized.

Her member, ebay was criticized when it bought skype at the time.

It sold skype at a basically neutral level and retained third -- retained 30% interest.

Two years later he was sold at a big profit.

The idea behind that is that mark profited because he bought that company.

That happens all the time, and at the time they did the right thing in terms of recusal and otherwise.

I think that is enough, but the bigger issue of what is going on with pushing of valuations, with nest, with whatsapp, it seems like all of the parties are only involved to push up valuation.

It is different than what happened with ebay and skype, but that is the percolating issue right now.

Should recusal be enough?

I think about bob iger, who runs disney, sitting on the board of apple.

Even if someone recuses yourself, when you sit in that apple board room with all of that disney knowledge and disney motivation in your head, doesn't it affect you?

I don't know if recusal is enough.

Essentially, these are people who see each other all the time.

It depends on the situation.

I think it was enough with ebay and skype, but whether it is enough going forward we are not sure.

I don't begin disqualifies mark from serving on the ebay board.

I think carl icahn is making a tempest in a teapot here.

Stephanie does bring up a point that applies to many more companies than ebay.

If mark andreessen is sitting on the board at ebay, we want to believe that every decision he makes, and every discussion he takes part in is done in such a way that he is putting shareholders first and foremost.

And that bob iger would do the same thing if he is sitting in the apple board room, even though there are so many ways in which apple's interest in disney's interest collide.

-- in which apple's interests and disney's interests collide.

Can we do this?

Is it impossible?

You can never separate.

You are in your own mind.

You can never separate these things out.

You have to be very careful.

In the first instance, recusal is most often the solution.

But you need to look at wider ties.

If you are competing and sharing information, it is probably better that person is not on your board.

Her are lots of directors out there.

Mark is a very bright and successful person, but he is not unique or irreplaceable.

When the ties get too cozy, the overlaps are too much, you need to do more than just recuse.

Whether it ebay is there are not, it does not seem to be the case.

But generally speaking.

You are the man who knows.

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


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