Today Carl C. Icahn released the
following open letter to stockholders of eBay Inc.
We have read the responses of eBay's public relations machine. We find it
interesting that Mr. Donahoe, Mr. Andreessen and Mr. Cook have decided to hide
behind them, rather than state the facts themselves.
FACT ONE
eBay has challenged us to focus on honest, accurate debate. We do not believe
eBay is serious about this. However, yesterday CNBC offered a public forum for
that debate. We immediately told CNBC we would be happy to do it, but we doubt
eBay will accept its own challenge. We will soon find out. At this moment, not
surprising to us, eBay has not responded. We eagerly await their reply.
FACT TWO
eBay was planning to IPO Skype. Mr. Andreessen and his investor group
preempted the IPO, purchasing 70% of Skype for less than what eBay paid for
it. Had eBay sold Skype to Microsoft at the price paid to Mr. Andreessen's
group, eBay shareholders would have been at least $4 billion richer upon the
sale. Mr. Andreessen's group profited by about $4 billion in only a year and a
half. This is an indisputable fact.
FACT THREE
eBay states it explored all available options for Skype before selling to
Andreessen's group. Since we are highly skeptical of this, yesterday we sent a
letter to eBay demanding to inspect all books and records regarding the
process surrounding this transaction – pursuant to our legal right under
Delaware law. Will Mr. Donahoe provide those records immediately or waste time
to fight our request and hide behind his legal army?
FACT FOUR
eBay states the conflicts regarding Mr. Andreessen's investments are
acceptable. Mr. Andreessen has funded, sits on boards of, and advises no less
than five competitors, four of which directly compete with PayPal – all the
while potentially having access to nonpublic information regarding PayPal's
operating performance. Based on our research, Mr. Andreessen's actions are by
far an outlier on public markets - even for technology company boards. We do
not consider them even close to satisfying the "world-class" ^ standards that
eBay claims to have established for its board.
FACT FIVE
It is interesting that eBay did not even mention Mr. Cook's alleged
transgressions in its reply yesterday. But eBay has previously stated that Mr.
Cook's company, Intuit (of which he is the founder, a board member, the
chairman of the executive committee and an employee), and PayPal are not
competitors. However, to state they are not competitors is absurd. Both PayPal
and Intuit have publicly declared the increasing importance and the desire to
greatly expand within payment processing over the long-term. Both companies
have identical product offerings such as "PayPal Here" and "GoPayment", among
many others. In our opinion, having Mr. Cook on the board while planning
PayPal's future is akin to having Pete Carroll, coach of the Seattle Seahawks,
sitting in when the Denver Broncos were constructing their game plan for the
Super Bowl (then again, maybe he did).
FACT SIX
Amazingly, eBay states the hiring embargo Mr. Cook allegedly demanded of the
company is "old" news. However, the Department of Justice complaint concerning
Mr. Cook's actions is still currently pending and the company has not
announced that it has taken any action regarding Mr. Cook's alleged attempts
to intervene in its hiring practices.
We look forward to an honest, accurate debate on the issues we have raised.
Sincerely,
Carl C. Icahn
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