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Shares on eBay are up on Friday after the online trading site has announced plans to avoid a proxy contest by appointing a new board member and reviewing assets such as StubHub.
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Elliott Management, which owns more than 4% of eBay (EBAY) and is one of the biggest investors in the company, gets a seat on eBay's board. Elliott pushed the e-commerce company to make changes, including the sale of its StubHub ticket sales unit and its global classifieds business.
In January, Elliott issued a letter to the eBay management, outlining a five-step plan for eBay to become a more valuable company. EBay shares could reach between 55 and 63 by the end of 2020, Elliott thinks.
Ebay shares climbed 5% before reducing some of those gains. The stock closed at 37.35. up 0.5% on the stock market today. The stock is up 43% since its lowest level in 30 months from 26.01 in December
The company has declared to cooperate with Elliott, Starboard Value and other significant shareholders in these initiatives.
Value placed on StubHub
"EBay, with the help of external financial advisors, has undertaken a strategic review of its asset portfolio, including, but not limited to, StubHub and the eBay Classifieds group," said eBay in a statement posted on its website. "There can be no assurance that the strategic review business will result in a sale, spin-off or other business combination involving eBay assets."
Elliott estimates that StubHub could be worth between $ 3.5 and $ 4.5 billion. EBay ads report between $ 8 and $ 12 billion in a sale or split.
EBay said it added Jesse Cohn, a partner of Elliott Management, to its board of directors. He also added Matt Murphy, President and Chief Executive Officer of Marvell Technology (MRVL), to his counsel.
On January 29, Ebay announced that fourth-quarter earnings were higher than analysts' estimates, as it also announced its first dividend. It will also increase its share buyback authorization by $ 4 billion.
The e-commerce company plans to pay back approximately $ 7 billion to shareholders in the form of dividends and redemptions over the next two years. Approximately $ 5.5 billion of this amount is being disbursed this year.
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