EBay adds 2 activist-backed directors and may carve off StubHub and classifieds unit

EBay said its strategic review won't necessarily "result in a sale, spin-off or other business combination."
EBay said its strategic review won’t necessarily “result in a sale, spin-off or other business combination.”
(Ben Margot / Associated Press)

EBay Inc. said Friday that it has reached an agreement with Elliott Management Corp. and Starboard Value, appointing two new directors and paving the way to potentially carving off some of its businesses.

Under terms of the deal, Elliott partner Jesse Cohn and Matt Murphy of Marvell Technology Group Ltd. join the San Jose-based e-commerce company’s board. EBay also said it would undertake a strategic review of its portfolio of assets, including StubHub and the Classifieds Group.

After talks with the investors over the last two months, “we all share common ground: We see tremendous opportunity ahead and want to see EBay’s full potential realized over the long term,” EBay Chief Executive Devin Wenig said. “The initiatives we are announcing today are the result of this constructive dialogue.”

EBay’s shares jumped as much as 5.3% on Friday before losing most of those gains. They closed up 0.5% at $37.35.


Elliott, run by billionaire Paul Singer, disclosed a 4% stake in EBay in January. The New York hedge fund proposed a five-point plan to improve EBay’s performance, including exploring a spinoff or sale of its ticket reseller StubHub and its classifieds business. The deal was struck ahead of a March 1 deadline for the activists to nominate directors at EBay’s annual general meeting. Starboard Value has about a 1% stake in EBay.

The investors added to the pressure on Wenig, who took over EBay after the company’s split with PayPal in 2015 with promises to return the online marketplace to prominence. The results have been slow, and EBay continues to lose market share to Inc., which is growing faster. EBay has launched marketing campaigns to expand beyond its base of men who are mostly ages 50 and older, but investors want more.

EBay’s stock could be valued at $55 to $63 a share if the company follows Elliott’s proposals, the hedge fund has said.

In the last three years, EBay has gained 20 million new customers, reaching 179 million, and has increased its inventory to 1.2 billion listings, up from 850 million. The company has also sold its stake in overseas online marketplaces such as Mercado Libre and Flipkart. It is looking to increase revenue from its new payments business and by selling more advertising on its site.


The deal announced Friday builds on other measures EBay has taken in recent months, including introducing its first dividend and committing to returning $7 billion in capital to shareholders over the next two years. The company is cutting 135 jobs and is consolidating geographic regions under one global leadership team.

Wenig has previously rejected the idea of selling StubHub and other pieces of the company. In the statement Friday, EBay said there is “no assurance that the strategic review will result in a sale, spin-off or other business combination.”

Cohn and Murphy will join the board immediately, and EBay said it will add a third new independent director later in the year. EBay also said it will begin an operating review of its business and announce the findings at an event in the fall.