Paypal Split From Ebay Case Study

Shareholder pressure was one of the reasons behind the PayPal split from the eBay. The activist investor Carl Icahn was the one major driver who pulls the PayPal split from the eBay. Carl Ichan think invest in two businesses with different type of strategies and forecasts better than the use of one business strategies and forecast. Carl Ichan have keep explain and speak out his own view about the PayPal should split from eBay. These give the shareholder pressure in their mind set and worry about the eBay and PayPal future performance. So the shareholders have been persuaded by Carl Ichan after his run the nine month of campaign to persuade and authorize from the shareholder and the CEO from the companies to separation of two companies. In my

When PayPal sold in the market, eBay have snapped it u by using the value around $1.5 billion. After the few years ago, the value of the PayPal assets has catapulted which worth $50 billion because of merger of eBay and PayPal that difficult to investor to see the value of each business. In my opinion, the separation of PayPal from eBay, these give a much limitless potential space to let both of companies to grow and increases their unlock value. This can be strength and opportunities to let eBay and PayPal show their potential to increase their share price and value to the shareholders so the shareholders can appraise them separately. Actually, the investors like to see the price or value of share reflects at the current amount of business earn multiplied by the value that assign to what company have done. To allow the outside people to invest both of the companies the separation of the two businesses will have its own share price to represent the value based on the business

According to the article, that have clearly state that, PayPal separation from eBay is because both of them have very different business operating and in different market, so this become a reason why PayPal’s should split from the eBay and use by Carl Ichan to persuade the shareholders to agree the separation. EBay is an ecommerce company and PayPal are payments firm. In my view, before separation, PayPal’s was follow to eBay strategies, that make PayPal’s cannot focus on its own strategic. The main reasons of eBay acquisition with the PayPal because of the eBay try to have own payment site in early 2001. Now rapidly changing in both marketplace, there a not lot of sense that they are stick together and follow the same strategic. Both of them need to come out their own strategic to competing with the new entry competitor and existing competitor. That is strengthen to let them be stronger and improve their services to increase the user or consumer loyalty and become the first place in their own market. By setting the right strategy, the eBay and PayPal can create the sustainable value for their shareholders and provide the new experience to global customer and create the competitive