eBay announced to separate PayPal and make it an independent publicly traded company.
eBay just dropped a big announcement. eBay announces to separate the company’s eBay and PayPal businesses into independent publicly traded companies in 2015. eBay bought PayPal back in 2002. Back then eBay paid $1.5bn and made Elon Musk his first fortune that enabled him to do SpaceX and Tesla.
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Creating two standalone businesses best positions eBay and PayPal to capitalize on their respective growth opportunities in the rapidly changing global commerce and payments landscape, and is the best path for creating sustainable shareholder value, the company said.
“eBay and PayPal are two great businesses with leading global positions in commerce and payments,” said eBay Inc. President and CEO John Donahoe. “For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value."
eBay expects to complete the transaction as a tax-free spin-off in the second half of 2015, subject to market, regulatory and certain other conditions.
eBay President and CEO John Donahoe and company CFO Bob Swan will be responsible for leading the separation of each business, with board oversight. This includes determining appropriate management and capital structures for eBay and PayPal, and putting in place appropriate operating agreements. Neither Donahoe nor Swan will have an executive management role in the new eBay and PayPal companies.
Devin Wenig, currently president of eBay Marketplaces, will become CEO of the new eBay company. As CEO of eBay, Wenig will lead the eBay Marketplaces and eBay Enterprise businesses.
Concurrent with the announcement of the business separation plan, the company also today announced the appointment of Dan Schulman to be President of PayPal, effective immediately, and CEO-designee of the standalone PayPal company following separation.
eBay trades up 7.73% in pre-market trading. Investors are apparently liking the idea of eBay and PayPal to go separate ways.
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