In January, eBay received a strong letter from investor activist Elliott Management, outlining the way forward for the company Elliot felt was a failure. Two weeks ago, the company announced that it was restructuring its operations and dismissing some of its workers. Today, the company announced new reorganization initiatives, many of which are a direct result of Elliott's letter earlier this year.
In the January letter, among others, Elliott implied that the company lacked operational discipline and that she thought that with some adjustments the stock performance could be much better. "Today, eBay suffers from an inefficient organizational structure, unnecessary expense and misallocation of resources," wrote Elliott at the time. At the same time, Elliott encouraged the company to focus on what it saw as its main value proposition, namely an e-commerce market. It meant getting rid of all the pieces that were not used on that mission, including StubHub, the online ticket market.
It is perhaps not surprising that today's announcement indicates that the company is reviewing its activities and making an inventory of its assets, including StubHub. "These initiatives include a review of the business and the launch of a strategic review of the company's asset portfolio, including StubHub and eBay Classifieds Group. eBay has worked with Elliott Management, Starboard Value and other major shareholders on these initiatives, including the addition of two new independent directors to the board of directors, "said eBay in the announcement.
New board members include Jesse Cohn from Elliott Management and Matt Murphy from Marvell Technology, as the company begins to change course.
The company previously announced that it was also transferring the online market, its main strategic asset, according to Elliott, under a single global management team instead of the regional approach previously adopted. The company also announced plans to increase the market's advertising budget, the statement said.
These changes come as eBay tries to find a way to increase shareholder value to appeal to activist investors such as Elliott Management and Starboard Value. In a statement, Devin Wenig, president and CEO of the company, tried to give the best face to these changes. "At the end of the day, we all share common ground: we are looking at huge opportunities and want to see the full potential of eBay in the long run. The initiatives we are announcing today are the result of this constructive dialogue, "he said.