What's PayPal's Updated Form 10 Mean For eBay?

In a report published Friday, JMP Securities analysts maintained a Market Perform rating on

, after PayPal's updated Form 10 gave additional details on its EBAY operational agreement. PayPal confirmed that the spin would be completed in the second half of 2015. The filing also provided details of the operating agreement between eBay and PayPal, including details of payments to be made by eBay and PayPal to each other if the latter's penetration rate on eBay changes from the current baseline of 80 percent. More specifically, "if the penetration rate increases, PayPal would pay eBay a set amount and vice versa below 80%, and we believe the goal is to incent eBay to maintain at least its current 80% penetration rate," the analysts said. In the report JMP Securities noted, "The filing also disclosed that PayPal expects to incur incremental public company costs of $100-$150 million annually and various management appointments, including John Donahoe as Chairman of PayPal and founder Pierre M. Omidyar as a member of the PayPal board." The analysts added said that there were no "major surprises" and that additional details would be provided when the spin gets closer to completion.