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eBay stockholders! There's MORE to COME, thunders Carl Icahn

Fight over minority investor's PayPal spinoff plan rumbles on

Activist investor Carl Icahn is continuing his campaign to get eBay to spin off PayPal, writing yet another letter to shareholders that said he hadn't even begun to fight to get his way.

"Stockholders, please stay tuned. There is more to come – much more," Icahn threatened in his latest open letter (emphasis his own).

The investor said that a recent shareholder survey by Bernstein Research had shown that a majority of eBay investors thought the composition of the board should change, which he held up as support for his position, while 43 per cent thought that splitting PayPal away from the online marketplace was the right thing to do.

"We are therefore naturally sceptical of recent articles reporting eBay CEO John Donahoe’s claims of widespread stockholder support for keeping the companies together," Icahn continued.

"While I find the Bernstein data points astounding in light of the fact that we have not yet even begun to formally reach out to our fellow eBay stockholders to make our case, I cannot say that I am particularly surprised at the level of apparent stockholder dissatisfaction with this board."

The etailer responded with a rather sarky comment that surveys made for "interesting sound bites".

"Surveys can create interesting sound bites, but we believe direct conversations with our shareholders are more meaningful and credible," the firm said in an emailed statement.

"Based on recent conversations with most of our top 20 shareholders, we believe there is strong support of eBay’s view that shareholders are best served by keeping PayPal and eBay together.

"Even the Bernstein analyst who conducted the survey notes that his firm is “not convinced that there is indeed a large value creation opportunity simply from separating the businesses". We agree, and we believe most of our shareholders do, too."

Icahn repeated his gripes against the board once more, namely: that the directors should not have allowed board member Marc Andreessen's venture capital firm to buy Skype from eBay and then sell it on at a massive profit to Microsoft not long after; that Andreessen has interests in other payments firms; and that fellow director Scott Cook's company Intuit also competes with PayPal.

In a statement to shareholders, Andreessen said that he categorically denied any allegations that he had "some kind of secret information that Microsoft wanted Skype".

"Mr Icahn is making up a fake conspiracy theory out of thin air," he said.

Icahn has launched a systematic campaign of open letters, media appearances, tweets and press releases to try to get eBay to consider his unsolicited proposal for the future of PayPal. His latest letter claims that spinning off PayPal would make it easier for the payments firm to land partnerships with companies that might be reluctant to sign up now because of competitive concerns with eBay.

As well as getting his way with PayPal, Icahn is also looking to get two of his nominees onto the board of directors who he said "will be focused more on enhancing value for all eBay stockholders than on leveraging their relationships with eBay to benefit their outside personal investments". ®

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