Pierre Omidyar, the billionaire founder of eBay, branded activist investor Carl Icahn “false and misleading” Thursday as a bitter row over the future of the auction site escalated.
Icahn has proposed that eBay spin off PayPal, the company’s electronic payment unit. The company has said it has reviewed that option and decided against it. But Icahn has attacked what he perceives as conflicts of interest on eBay’s board.
Icahn attacked board member Scott Cook, the founder and major shareholder of finance software firm Intuit, which Icahn argues is a direct competitor of PayPal.
Ebay has said PayPal and Intuit do not compete, but Icahn disagrees. “In our opinion, having Mr Cook on the board while planning PayPal’s future is akin to having Pete Carroll [the coach of the Seattle Seahawks] sitting in when the Denver Broncos were constructing their game plan for the Super Bowl. (Then again, maybe he did),” he wrote in an open letter to shareholders.Icahn pointed to a hiring arrangement struck with eBay that barred the company from taking staff from Intuit. That arrangement is being investigated by the Department of Justice.
“Mr Icahn’s claims about Scott Cook also are unfounded. As founder of Intuit and chairman of the company’s executive committee, Scott has an exceptional track record of creating value and driving innovation. He has been an enormous asset to eBay’s board for many years. The overlap between Intuit and eBay is small for both companies. Regarding hiring, any restrictions ended years ago,” said Omidyar.
Icahn argues shareholders have suffered in the past from similar conflicts on eBay’s board. According to the investor board member Marc Andreessen, a venture capitalist, unduly profited from eBay’s sale of videoconferencing-company Skype.
“Ebay was planning to IPO Skype. Mr Andreessen and his investor group preempted the IPO, purchasing 70% of Skype for less than what eBay paid for it. Had eBay sold Skype to Microsoft at the price paid to Mr Andreessen’s group, eBay shareholders would have been at least $4bn richer upon the sale. Mr. Andreessen’s group profited by about $4bn in only a year and a half. This is an indisputable fact,” Icahn wrote.
Omidyar said Icahn was “making unsubstantiated claims about our company – and deliberately impugning the integrity of our directors.” He said Andreessen had recused himself from all deliberations on the Skype transaction and the sale was “widely seen as a superb outcome for the company.”
Icahn’s sally against eBay comes after a similarly high-profile, if less heated, battle with Apple. Earlier this month the activist investor ended a six-month campaign to force Apple to buy back $50bn of its own shares by September.
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