E-Commerce service provider eBay Inc. (EBAY) announced that one of its board members, VC Marc Andreessen, will resign from the board.
43-year old Andreessen joined eBay’s board in Sep 2008. A co-founder of Netscape and a director at Hewlett-Packard Co. (HPQ), Andreessen stated that this is the right time for him to hand in his papers as PayPal and eBay are separating. He also showed complete confidence in eBay’s CEO and board to oversee the split successfully.
The news comes on the heels of eBay’s announcement regarding its plans to spin off PayPal into a publicly traded company in the second half of 2015. Carl Icahn, eBay's sixth-largest shareholder with 2.48% stake as of Jun 30, 2014, was the first to propose PayPal’s divestment in January this year. He also accused Andreessen of investing in eBay’s direct competitors and taking decisions which were not always in the best interests of the company.
Earlier, the idea to separate the two was rejected by eBay’s CEO John Donahoe, stating that it was “not a good idea.” However, lately, eBay’s board has changed its stance and believes that the two entities will be better off as independent public companies.
The separation, to take place by the end of 2015, will give PayPal more scope to form alliances with retailers and other financial firms. This, in turn, will enhance competitiveness of both the companies in their respective fields. At the same time, several analysts are of the view that the separation could make both eBay and PayPal attractive takeover targets for the likes of Alibaba Group Holding Ltd. (BABA) and Google Inc. (GOOGL).
Reportedly, eBay is in no hurry to fill the vacated board seat. Currently, the company has 11 directors. CEO John Donahoe, who will oversee the separation of eBay into two businesses, will not take up an executive role at either of the companies. Instead, he will join one or both the boards.
Currently, eBay has a Zacks Rank #3 (Hold).
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