Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Fri Mar 1 2019 09:10:45

eBay Officially Explores Sale or Spinoff of Company

By: Ina Steiner

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See update to this post below. eBay may breakup the company with the help of outsiders, a move that has been seen as a possibility since January 22nd. Under pressure from activist investors demanding eBay improve its lackluster performance, the company announced today it will explore the sale or spinoff of its assets.

"eBay, with the assistance of external financial advisors, has initiated a strategic review of its asset portfolio, including but not limited to StubHub and eBay Classifieds Group," eBay wrote. The words "not limited to" are important, since it leaves open the possibility eBay could sell off its eBay Marketplaces business. 

In its announcement, eBay states, "There can be no assurance that the strategic review being undertaken will result in a sale, spin-off or other business combination involving eBay's assets. eBay does not intend on making further public announcements regarding the strategic review unless and until the Board has approved a course of action requiring disclosure."

EcommerceBytes surveyed sellers last month about a possible breakup of eBay business units. The issue of whether eBay should sell StubHub or eBay Classifieds seemed to come down to whether the ticket marketplace or classifieds business were contributing revenue or whether they were distractions from the core Marketplaces business.

The survey found that 59% of sellers said eBay should sell StubHub, while 54% of sellers said eBay should sell its classifieds business.

We also asked readers their opinion about potential acquirers of the eBay Marketplaces business in the event eBay was forced to sell it. 

Sellers said they would prefer Google over Amazon as a possible acquirer of eBay by a wide margin - 18% and 5%, respectively. But slightly more sellers (20%) would rather see the board take eBay private. See this EcommerceBytes Blog post for the complete breakdown.

In another concession to activist investors, eBay agreed to add three members to its Board of Directors, including Jesse Cohn of Elliott Management and Matt Murphy of Marvell Technology.

While many sellers blame former CEO John Donahoe for the problems eBay now faces, today's announcement cements Devin Wenig's legacy as the CEO who failed to turn around the company, or at least failed to do so on his own.

Update 3/1/19: After reading this post, an eBay spokesperson said the sale of the core marketplace business has not been part of the discussion.



Comments (36) | Leave Comment | Permalink

Readers Comments

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

by: pace306 This user has validated their user name.

Fri Mar 1 09:41:35 2019

As mentioned before (by many others besides myself) - the divesting of SH & Classifieds would allow eBay:

1) to have cash to inject/prop up the failing Marketplaces
2) give eBay time to spend "only" on Marketplaces
3) give eBay time to FULLY integrate the other online shopping platforms it owns into eBay (like the Japanese one).

People who buy tix on SH, dont "then" come to eBay and vise versa.

It COULD have been that way if the portal to buy tix was fully integrated into eBay, but (like usual) eBay flubbed the whole thing. The "Harvard trained lawyers" thought it was better to just use SH's profits to cover eBays mistakes, instead of integrating it.

Stupid DW.

The Marketplace is DWs crown jewel and he will never sell (since he wont directly profit from it) since its a PRIDE issue for him (he thinks hes Bezos Jr).

Truth is - if eBay stopped fighting with sellers, started listening to them and helping them do "better", instead of forcing crap they dont want/need on them "just to prove they can", the limit for them would be "sky high". But DW isnt that smart, so he wont do that.

Lets see how this plays out - but Im not holding my breathe.

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This user has validated their user name. by: The End

Fri Mar 1 10:43:01 2019

Somebody, hang a sign on the Ebay CEO door :
"We all know the place can run itself.
You're only here for appearances.
Don't get cocky."

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by: Whatever This user has validated their user name.

Fri Mar 1 11:06:40 2019

we should all be careful what we wish for - it never gets better as the cash in our pockets is constantly shrinking

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This user has validated their user name. by: toolguy

Fri Mar 1 11:36:02 2019

Is the grass greener over yonder?

Don't let the suns reflection fool you. . . .

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by: Cyclestripper This user has validated their user name.

Fri Mar 1 12:14:46 2019

Skeptical that any of this will benefit sellers or buyers.  

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This user has validated their user name. by: Rexford

Fri Mar 1 14:10:01 2019

External financial advisors + Wenig + the Board (of back scratchers).

The carnie folk and confidence men are in town and they are in charge of the shell game.  The only folks who will win will be investors and the C-Suite officers.

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This user has validated their user name. by: Ina

Fri Mar 1 15:19:40 2019

Update 3/1/19: After reading this post, an eBay spokesperson said the sale of the core marketplace business has not been part of the discussion.

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

This user has validated their user name. by: CanBrit

Fri Mar 1 15:41:50 2019

Well I do believe that some of the new investors who now have seats have maybe been reading this blog. One would hope anyway. Since this was part of their discussions back "towards the end of 2018", I believe they were increasingly getting paranoid of the state of the main marketplace. It was a good idea to be worried. It is still a good idea to get into the minds that the stuff always falls from the top. The removal of the top along with his chimps would do more for that company and for us than anything else. Get rid of the virus....no more disease.

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

by: Michael in BC This user has validated their user name.

Fri Mar 1 16:46:57 2019

The Core Marketplace SHOULD be ''part of the discussion''.  (1) Come up with something to fix or replace your appalling search engine...  (2) Separate the ''Marketplace'' into 'new' and 'classic'. and (3) Show all listed items, not just a select few.  Addressing these issues competently will encourage the return of OOAK and vintage sellers ..... and BUYERS who currently spend their money elsewhere.

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

by: Ebay Little Shop of Horrors This user has validated their user name.

Fri Mar 1 17:15:01 2019

Who is the third new board member?

What does Marvell Technologies have to do with ebay? Why are they there?

All I could find is that they make chips and their stock is at $20.

While the sale of the marketplace hasn't been discussed, no one is ruling it out.

I am enjoying this. Ebay said there would be no more news until the board agrees on a plan of action, but I sure hope someone spills something.

Maybe we'll hear about it here first.

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

This user has validated their user name. by: CanBrit

Fri Mar 1 17:58:44 2019

Interesting comment from an analyst reported by CNN today. Pretty much what we're all thinking at the moment. Yes, selling of subsidiary's will bring a cash infusion, but what is going to stop a sinking ship with the team that's leading them now? The years of Wenig's management has certainly brought velocity to the decline.

"Even if it does end up appeasing the investors by offloading assets, some analysts question how much it would turnaround the business, which faces a years-long decline in relevance and prestige.
EBay has been losing share in e-commerce for many years now," says Ygal Arounian, an analyst who tracks eBay for Wedbush. "Amazon (AMZN) has done a good job of displacing them and elbowing them out
The best case scenario, he says, is that selling StubHub and the Classified business leads to a financial windfall, which can then be reinvested to help improve eBay's core marketplace product.
Just selling those businesses doesn't automatically solve their larger problem, which is that their marketplace business hasn't kept pace, Arounian says."

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by: comments This user has validated their user name.

Fri Mar 1 20:36:28 2019

Whatever happens to marketplaces I would like to see it head towards the direction where it will be seen as a higher priority with a staff that will start to assume that many sellers intentions are good and honest.

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

by: thriftyone This user has validated their user name.

Fri Mar 1 22:12:27 2019

@ebay little shop of horrors Marvell was appointed by Starboard Value(the other major investor)...Starboard owns 6.7% of Marvell...only 2 seats were given one to Elliott and the other to Starboard/Marvell. A third seat to a new independent director will be added later in the year by eBay.

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by: I Must be Crazy This user has validated their user name.

Fri Mar 1 22:25:27 2019

I think any talk about turnarounds is ludicrous at this point. That ship has sailed. Ten years of failed management have allowed eBay to fall too far behind.  No amount of money is going to amount to any meaningful change. They have already flushed billions down the drain for nothing. Ebay will be lucky to be around in 5 years.

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This user has validated their user name. by: iheartjacksparrow

Fri Mar 1 22:50:10 2019

Even if eBay sells off StubHub and the classifieds, does anyone honestly think that Devin will use that money to improve eBay? Everything they do is for the cheapest amount possible. I hope Elliott can force Devin and his buddies out, and put people in place who can turn eBay around.

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

by: Silver Ice King This user has validated their user name.

Fri Mar 1 23:11:27 2019

I think that Elliott has every intention of forcing Wenig out after they get on the board.  I sure cant wait to see what happens to his 2018 bonus that he was counting on getting.  If he is given anything after the poor performance of Ebay this past year then the Board of Directors needs to be completely replaced as Wenig is personally responsible for Ebays current situation including the pathetic Seller Hub that is the worst piece of programming I have ever had to deal with.  Wenig continues to go cheap hoping to show profit and get his bonus while completely destroying what Ebay was and is.  

Hopefully at the next Shareholder meeting they will put all of their votes together and get rid of Wenig.  I am not sure exactly how it works but i do know that the Shareholders have enough clout to have him fired and they need to do so and then get somebody in that understands Ecommerce, not somebody who is going to hire his good buddy to then try and issue a statement about the GTC changes and  try to do damage control as Ebay is now getting just what they hate - a lot more bad press.  Ebay needs to just reverse that stupid decision and realize they all have a better chance of keeping their jobs if they listen to those that pay the fees that supports EBay.  I also notice that they do not allow any comments under that damage control statement as they remember what happened to Kupbens when he first issues a statement about the boards that meant as damage control and they had to turn off the comments because they were so negative.  yet they still have not learned why their revenue continues to drop every quarter.  

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by: Ebay Little Shop of Horrors This user has validated their user name.

Sat Mar 2 09:06:54 2019

Thriftyone, thank you.

You can't simply replace Wenig and expect improvement.

Everytime I see eBay, my brain hears ewwwbay. Sweep the place out. Change that name. Clean out all the rules. Start over.

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by: Snapped This user has validated their user name.

Sat Mar 2 09:10:45 2019

''''...some analysts question how much it would turnaround the business, which faces a years-long decline in relevance and prestige.''''

CanBrit's quote from CNN hits the root here.  It boils down to: what asset(s) does eBay actually have value enough to keep in order to decide which can be sold to fund - meaning invest - leveraging that asset into a growth element? More sgnificantly, would they even invest the infusion in that asset, vice continued propping up of the beau that brung 'em to this point in the dance?

It would seem unlikely they have a clue of a plan, given the relatively short 8 weeks since the ball dropped that has past with so much volitility.  

Equally clueless are they of this 'root' herein: their ''year's long decline n relevance and prestige''.  Oh, they know it's happened, just not why.  They don't see the mistake made by dissing their base.  Or by ''letting go'' of their past, which WAS the asset of value in question.  Their 'name' as known to be THE place to sell anything.  

Only now, with 'anything' redefined.  And with the 'vendor' so severely yolked, prodded, and whipped - in darkness too often - as to be too painful to endure.  With too much square peg jamming and feeding of a declining diet unsuited to nutritional needs the breed.  And all the while, blaming the stock for not pullng their load right.  

Their most valuable asset is the niche they gave up.  Has that root dehydrated beyond rejuvination?  Would they care?  Unless that particular exploration is on the map, doesn't matter what they sell.  

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

This user has validated their user name. by: Beanie

Sat Mar 2 10:57:19 2019

@ Snapped, in your post, the last paragraph sums up everything that is wrong with Ebay. Ebay thrived for years until Donohoe and Wenig took over. What idiots came up with this "letting go of a successful past" garbage? You don't let go of anything that is successful, you build on it. Does New Coke ring a bell? At least Coke LISTENED to their customers and reversed back to Coke classic. Whether it was a marketing gimmick or not, I don't know, but they corrected their mistake. Ebay, your sellers have been SCREAMING for years to get back to your roots. Are you FINALLY going to listen now? Sadly, I think might be too late. Too much damage has been done.

Perminate Link for eBay Officially Explores Sale or Spinoff of Company   eBay Officially Explores Sale or Spinoff of Company

This user has validated their user name. by: Marie

Sat Mar 2 16:59:32 2019

All this talk of spin offs and sell offs it to benefit shareholders NOT the Ebay marketplace / Sellers.

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