Carl Icahn and Elon Musk Are Wrong: Here's Why eBay Keeping PayPal Makes Sense

Before you go, we thought you'd like these...
Before you go close icon

It's quite refreshing that all the hullabaloo about separating PayPal from its parent company, eBay ,has finally ended. Activist investors Carl Icahn and Elon Musk tried hard to get eBay to divest its high-growth unit, arguing that an independent PayPal would be more valuable than its current $40 billion valuation. Musk went on to say that PayPal would ''simply be cut to pieces'' by rivals such as Amazon Payments, Google Wallet, or even Apple's  upcoming mobile payment platform if it remains a part of eBay.

On the surface, it appears as if eBay has been piggybacking on PayPal's success. PayPal's $6.6 billion revenue in 2013 is equivalent to 41% of eBay's overall revenue, and 36% of its profit. eBay's top-line growth of 20% in fiscal 2013 was 1.5 times better than its overall growth of 14%, and 1.8 times higher than the 11.1% growth of its other business segments. Additionally, 30% of PayPal's $180 billion in online transactions in 2013 took place on the eBay website.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading


S&P 5002,143.16-8.17-0.38%
HANG SENG23,358.51-206.60-0.88%
NIKKEI 22517,391.8426.590.15%
USD (per EUR)
USD (per CHF)0.990.00-0.15%
JPY (per USD)
GBP (per USD)
More to Explore