What’s the Reasoning Behind Icahn’s PayPal Idea?

Your next video will start in

Recommended Videos

  • Info

  • Comments


Jan. 22 (Bloomberg) –- Bloomberg’s Cory Johnson and Trish Regan dig into eBay’s and PayPal’s numbers and the reasons behind Carl Icahn’s proposal to spinoff of PayPal from eBay. They speak to Pimm Fox on Bloomberg Televisions’ “Street Smart.” (Source: Bloomberg)

All right, cory johnson.

What is the reaction so far from ebay and how bad is ebay really doing?

What were the results today?

They did not show the steady, consistent growth we've seen from ebay, but there were pockets.

There's a lot of testament in this quarter.

In analyst to is a big fan of "bloomberg west," on with us all the time.

You said that the polling compared to amazon show the ebay was going to be a lot weaker, that they were losing some steam.

Indeed the quarter came in with strong growth.

The thing that jumped out at me was the paypal business, just as carl icahn noted.

Businesses looking very strong.

It could get a different kind of multiple on wall street.

It's also interesting as was reported just an hour ago, they are really showing an accelerated growth.

Merchant volume is up from 1.4 on the previous year.

It's also 18% growth.

That's more than me growth of the last quarter.

Why is that important?

Because it means it is a reacceleration of growth.

So, it's about an increase in the multiple.

You split the two businesses and the faster growing business get the -- and you can see why management is not necessarily like that idea at first glance.

I think that's probably a good point.

You want to be in a business that's growing.

If it is perceived your business is the failed one and you are left behind not going with paypal, you can imagine there would be pushed back there.

I was going to say, cory, i can look in our past as someone named sam gannon who worked at the citgo -- pacific belt.

It could be the same kind of thing.

Faster growth indeed, but perhaps not the best move overall.

The company is poised for a very interesting growth rate.

We did a full day of "bloomberg west" at ebay.

I thought that would be my gotcha question.

We see a slightly better growth rate with paypal.

We see a difference in the infrastructure is not just in the u.s., but also worldwide.

Paypal is positioned to take advantage of that.

It's interesting.

Netflix -- however, his son and his son's partner still have a derivatives stake in the company.

He has been active in apple, now in ebay.

These are very public companies.

Another good example.


What you think of him getting into the tech space like this?

To me, this is like a discussion of warren buffett not being involved in tech or is he involved in tech?

We are in an era right now are we see recent names from the last bubble, big names for ebay or google coming even going further back into apple, and they trend into kind of a value -- a valuation that are not representative of the growth rate.

Look, the growth rate of some of these countries -- companies come up high double-digit growth.

You see the price-earnings growth ratio.

For carl icahn to look at a company that also has the classic old b o -- lbo korver greater attitude to break up the company and be involved with a discounted stock like ebay when he looked to price to earnings growth, you can understand.

It does not matter if it is tech.

It's a financial opportunity.

Is it for analyst to figure

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


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change