eBay reports strong Q4 quarter; Carl Icahn looks to spin off PayPal

New York -- eBay posted a profit of $850 million, compared with earnings of $751 million a year ago, for its fourth quarter, ended Dec. 31, 2013, while revenues rose 13% to $4.5 billion, fueled by strong mobile results. In reporting its results, the company also said it has received a proposal from activist investor Carl Icahn seeking to spin off PayPal as a separate company.

The company’s Marketplaces and PayPal units achieved record mobile results overall in 2013, each exceeding $20 billion in mobile volume. Mobile users represented 40% of eBay’s 36 million new users and accounts in 2013.

“We feel good about our performance and strong finish in the fourth quarter, with the holiday shopping season clearly showing how online, mobile and other omnichannel commerce capabilities are changing how consumers shop and pay,” said eBay CEO and president John Donahoe.

The company’s total mobile commerce volume grew 88%, with eBay reaching $22 billion and PayPal hitting $27 billion in 2013. And mobile added more than 14 million customers.

PayPal delivered a strong fourth-quarter performance with accelerating momentum in its merchant services business. Revenue increased 19% in the quarter. PayPal gained 5.2 million active registered accounts in the quarter and ended the year with 143 million, a 16% increase.

eBay said that activist investor Icahn has nominated two of his employees to its board of directors along with the non-binding proposal for a spinoff of its PayPal business into a separate company. The notice stated that companies controlled by Icahn had, earlier this month, acquired shares and derivative securities that give him an economic interest of approximately 0.82% in the company.

eBay’s board said it believes the company and its shareholders are best served by the current strategic direction of the company and does not believe that breaking up the company is the best way to maximize shareholder value. As part of eBay, the company stated in a press release, PayPal is able to leverage the company’s technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide. Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at global scale, creating value for consumers, merchants and shareholders, the company said.


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