Carl Icahn attacks eBay chief's 'blindness' to problems at the company

Investor claims John Donahoe is “completely asleep” to conflicts of interest among eBay board members

Two pedestrians pass eBay headquarters in San Jose, California
The comments were the latest salvo in Carl Icahn's ongoing campaign to force eBay to spin off PayPal as a separate company Credit: Photo: AP

A war of words has broken out between eBay and Carl Icahn, after the billionaire activist investor accused the online retailer’s chief executive of being “willingly blind” to problems at the company.

Mr Icahn, who owns around 2pc of the retail giant, said that John Donahoe was “completely asleep” to conflicts of interest among eBay board members, and raised doubts over his ability to lead the company.

“How can Mr Donahoe be the right person to make the strategic decisions necessary to achieve long-term value creation when he relied on his ‘world-class board of directors’ with competing interests that challenge their fiduciary responsibility to eBay shareholders?” he wrote in an open letter to the company.

In particular, Mr Icahn claimed that Marc Andreessen, the venture capitalist, profited from Skype after eBay sold it outright instead of spinning it out and listing it on the stock exchange. He also criticised Scot Cook, the founder and a major shareholder of Intuit, a rival to eBay’s PayPal electronic payments business.

“The complete disregard for accountability at eBay is the most blatant we have ever seen,” Mr Icahn said.

The comments were the latest salvo in the 78-year-old investor’s ongoing campaign to force eBay to spin off PayPal as a separate company. He has previously described PayPal as a “jewel”, whose value is being “covered up” by eBay.

On Monday, he added: “Creating two dedicated and highly focused independent businesses would provide employees and stockholders the best opportunity to remain competitive over the long term. We hope that all eBay stockholders recognise that PayPal is at a critical point in its development and that the payments market is evolving rapidly around it.”

Ebay did not take kindly to his suggestions, however. The company accused Mr Icahn of “mudslinging” and said it favoured more “substantive” discussions about why Paypal and eBay are “better together”.

It added that Mr Andreessen and Mr Cook was “impeccably qualified” to be directors, and invited shareholders in the company to have their say at the company’s annual investor meeting.

Shares in the business rose more than 3pc to $56.44.