Will eBay Back Down From Carl Icahn Feud?

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March 20 (Bloomberg) -- Harvard Business School Management Professor Bill George discusses billionaire investor Carl Icahn’s call for eBay to spin off PayPal on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)

Management at harvard business school.

Now that icahn has said he is willing to go for an ipo of 20% of paypal, do you believe that he is adjusting his strategy and going for something that is more feasible?

I think he definitely is.

One thing about perl, he is very tenacious.

That's one thing about carl, he is very tenacious.

The next thing coming as a proxy fight with two directors who are close to him and that have no knowledge of the tech business.

Now he is backing up and saying what he percent.

He is looking for any opening to shake up the ebay board.

The ebay board is very strong.

They have an outstanding board.

Could be the best board on silicon valley.

It there are very clear with what they do.

If i was advising the board, i would say stay the course.

Do not deviate.

You had tremendous returns for your shareholders.

465% since 2009. you mentioned his erratic behavior.

Perhaps the strategic.

What is the most effective way of dealing with someone like a carl icahn?

You need to be preparative for you come in very you should not wait until he attacks.

You need to think about all the things he might do, including proposing a spinoff like this.

You need to justify to your shareholders like mr.

Miller why having paypal as part of ebay make sense.

You need to be in close contact with all your major shareholders and always be justifying your portfolio.

Show why this makes sense.

Ebay has done that.

You can no longer just say, well, it's a great portfolio.

Just connect the business.

You have to show the relationship and how you add value.

John donahoe has clearly passed the test of doing that.

That is what you have to be prepared.

Bill, you have been involved in activist fights with carl icahn over time warner and john who -- time warner and yahoo!

Ebay is undervalued.

We own ebay.

I think he has brought up a weakness in the governance of ebay when mark said -- they're both high-quality guys.

Having a board member recused himself and have his firm by something that ebay is not selling, they have to believe they're earning an above average return on that price.

Ebay is going to earn a below average return by selling at that price.

As a board member, i think you should be arguing against that.

Nicely said.

This is the critical point -- if it's a use of cash debate, can a board shift to make a better use of cash for shareholders echo is there an experience that that will occur at ebay?

They can do acquisitions for cash.

I don't see any reason.

I think the real issue is building up a platform.

Their issue is as much google is anything else.

They have to build a broadly based platform.

They have been on the leading edge of mobile in that.

They have competitors and facebook and google who want against the space.

They have to keep moving ahead and keep running their platform.

They should be looking at their cash right now.

So they can broaden their platform and continue to be a growth stock.

Nothing wrong with being a value stock.

They want to continue to grow this business.

Take you so much.

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


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