In January, eBay obtained a powerful letter from investor activist Elliott Administration, outlining the best way ahead for the corporate Elliot felt was unclear. Two weeks in the past, the corporate introduced that it was restructuring its operations and dismissing a few of its employees. Immediately, the corporate introduced new reorganization measures, most of that are instantly impressed by Elliott's letter earlier this yr.
Within the January letter, amongst different issues, Elliott implied that the corporate lacked operational self-discipline and believed that, with some modifications, the return on its shares could possibly be significantly better. "Immediately, eBay suffers from an inefficient organizational construction, pointless expense and misallocation of assets," wrote Elliott on the time. On the identical time, Elliott inspired the corporate to give attention to what it noticed as its major worth proposition, specifically an e-commerce market. It meant eliminating all of the items that didn’t fulfill that mission, together with StubHub, the net ticket gross sales market.
It’s maybe not stunning that right now's announcement signifies that the corporate is at the moment reviewing its actions and making a list of its belongings, together with StubHub. "These initiatives embrace a assessment of the enterprise and the launch of a strategic assessment of the corporate's asset portfolio, together with StubHub and eBay Classifieds Group. eBay has collaborated with Elliott Administration, Starboard Worth and different main shareholders on these initiatives, which embrace the addition of two new unbiased administrators to the board, "mentioned eBay in its announcement.
These new board members embrace Jesse Cohn, from Elliott Administration, and Matt Murphy, from Marvell Expertise, as the corporate begins to shift focus.
The corporate had beforehand introduced that it was additionally transferring the net market, its key strategic asset, in line with Elliott, beneath a single international administration workforce as a substitute of the regional method adopted beforehand. The corporate has additionally introduced plans to extend the market's promoting price range, the assertion mentioned.
These strikes happen as eBay tries to discover a solution to improve shareholder worth to attraction to activist buyers akin to Elliott Administration and Starboard Worth. In an announcement, Devin Wenig, president and CEO of the corporate, tried to provide the most effective face to those modifications. "On the finish of the day, all of us share widespread floor: we’re large alternatives and need to see the complete potential of eBay in the long term. The initiatives we’re asserting right now are the results of this constructive dialogue, "he mentioned.