Icahn: eBay could spin off 20% of PayPal in an IPO

|About: eBay Inc. (EBAY)|By:, SA News Editor

In a twist on his ongoing calls for eBay (EBAY +0.2%) to spin off PayPal, Carl Icahn argues the company would benefit from selling a 20% stake in the online payments giant through an IPO - a move similar to the one EMC carried out with VMware in 2007.

Icahn sees an IPO not only unlocking value due to the lofty valuation the Street might assign to PayPal, but also by giving PayPal's management more independence (previous) and creating "a valuable currency" that could be used for M&A and attracting talent.

The activist investor also notes a 20% IPO would allow eBay to maintain the synergies between PayPal and Marketplaces CEO John Donahoe has argued justify keeping the businesses under one roof, and thinks it would eliminate "dissynergies" he believes have prevented PayPal from pursuing strategic partnerships with financial and Internet giants.

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