L2 founder and CEO Scott Galloway said on Bloomberg this week eBay should spin off PayPal as Investor Carl Icahn has suggested. Galloway said there are no synergies between the online marketplace and the payment provider, but owning different companies enables CEOs to hedge and smooth out earnings. However, shareholders do not want CEOs to diversify for them; they want them “losing sleep” and staying focused on performance.
Galloway said PayPal benefited in its early days from captive customers on eBay, but now, many customers might be avoiding it because of its close relationship with eBay. PayPal is poised for exceptional growth on its own. Galloway added spinning off eBay would be accretive to shareholders and “the right thing to do”, but unlikely to happen. See full video here.