Feeds

eBay cops $3 BILLION tax bill after moving its profits back onshore

IRS kicking leaves tat bazaar with $6bn for potential buyouts

Providing a secure and efficient Helpdesk

Online tat bazaar eBay has copped a $3bn tax bill after bringing $9bn of cash held overseas back to the US. The firm hopes to use the remaining money to fund potential acquisitions at home.

The firm announced as part of its first quarter earnings that it had paid a discrete tax charge of around $3bn to bring the cash pile back to the US to provide “greater financial flexibility”.

"If you look at our last 15 acquisitions, my guess is ten have been inside the US, maybe 11," chief exec John Donahoe said in an interview. "Just looking at that versus where our cash is located, you just say, alright it would make more sense to have more cash in the US for M&A."

The move beefs up the company’s war chest, but it also pushed the firm into a loss in the quarter on the tax charge. The firm registered a net loss of $2.3bn for the three months, even though revenues rose by 14 per cent from the same time last year to $4.26bn.

eBay wouldn’t say how it intended to splash the cash in America, but it said it saw opportunities at home for the extra funds.

“The reality is we're seeing growing opportunities in the US," CFO Bob Swan said during a call with analysts. "Additionally, we are an acquisitive company and we need to ensure we have the resources available to capitalize on targets that become available both domestically and abroad."

Despite eBay’s plans for expansion and the end to activist investor Carl Icahn’s griping over the firm’s handling of subsidiary PayPal, investors didn’t seem too happy. While first quarter profit before the tax charge was better than expected, the forecast for next quarter was slightly below analyst estimates, pushing shares down six per cent in early morning trading to $51.30. ®

Beginner's guide to SSL certificates

More from The Register

next story
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
Hey Brit taxpayers. You just spent £4m on Central London ‘innovation playground’
Catapult me a Mojito, I feel an Digital Innovation coming on
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
EU probes Google’s Android omerta again: Talk now, or else
Spill those Android secrets, or we’ll fine you
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.