Why Is eBay Returning Profits to the U.S.?

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May 2 (Bloomberg) -- eBay’s move to bring home part of its international cash hoard opens the door for it to do multibillion-dollar acquisitions, just as the company needs to rev up growth. Bloomberg’s Jesse Drucker reports on Bloomberg Television's “In The Loop.” (Source: Bloomberg)

Back to the u.s. jesse, why would ebay want to do this on so many companies have said, lower your tax rates before i bring the money back?

It is a good question.

What is interesting about ebay is that a number of companies do bring the cash back home, but they do not generally advertise that the way ebay did.

Pfizer has been gradually taking tax reserves for cash rather quietly.

Ebay explicitly said we are taking this big charge to bring all of this cash back home.

It is probably more likely that it is for a share buyback.

It is a great point.

Why would they advertise this?

One possibility is maybe to smooth over disappointing earnings.

Otherwise, it is very page will your.

-- peculiar.

If they're doing and i position, you would think they would wait -- and acquisition, you would think that they would wait until they have an acquisition lined up.

If it were for an acquisition, who do you think it would be?

I don't think i would like to speculate.

One thing that is interesting about ebay is that they are taking the amount -- is the amount of taxes they are taking shows that they paid virtually no income taxes on this stuff overseas.

Ebay is allocating most profits by paying no income tax at all.

There is a tax element to pfizer making a bid for astrazeneca, the u.k. drug company.

It may help them lower their tax rate?

Yes.

If that deal with pfizer goes through, it will almost definitely significantly lower its tax rate.

What pfizer is doing is they're going to structure the acquisition where there will be a new u.k. holding company at the top.

Although pfizer's employees and executives can be in new york, they can take the benefits of their he is tax incentives the u.k. has established in the last couple of years.

It is really as a result of shuttling paper through this acquisition.

Thank you so much.

Coming up, story time -- ralph nader will be joining us with his take on jobs and the economy.

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