eBay Inc (NASDAQ:EBAY) is in the midst of a major disagreement with billion activist investor Carl Icahn. One of the latest blows to Icahn in the disagreement is that eBay rejected his two nominees for the board of directors and decided to renominate every director up for re-election this year. Icahn published a criticism of eBay CEO John Donahoe in a letter to shareholders. Icahn said that the sale of Skype was mishandled and costed the shareholders $4 billion.
Carl Icahn is continuing to demand eBay to spin off the PayPal payment processing division. Icahn’s proxy battle against eBay has been taking place on his corporate blog, on Twitter, and on TV appearances. Icahn’s harshest criticisms have been against Donahoe and board members Marc Andreessen and Scott Cook.
Who were Icahn’s nominees? Daniel Ninivaggi, co-CEO of auto parts manufacturer Federal-Mogul Corporation and Jonathan Christodoro, managing director of Icahn Capital LP. Icahn said that Donahoe was wrong for selling a majority stake in Skype to an investor group that included Andreessen’s investor firm for $1.9 billion. Skype was acquired by Microsoft for $8.5 billion only two years later.
Icahn claims that Microsoft was interested in buying Skype around the time that the investor group was negotiating for a majority stake, but had concerns over a legal battle between eBay and Skype’s founders. Icahn suggested that Icahn should have settled the litigation and then run a sales process.
?I believe that all stockholders must consider whether Donahoe is either incompetent or negligent or, perhaps even worse, was simply taking the easy path of bowing to the wishes of a respected and powerful board member,? stated Icahn.
Andreessen said that he recused himself from eBay board discussions about the Skype deal and disclosed his conflicts of interest as a board member. Donahoe pointed out that eBay’s stock price rose 460% in the last five years.