Icahn's Demands for eBay | Investor Beat 1/23/14 | The Motley Fool

TL;DR

Billionaire investor Carl Icahn publicly demands that eBay spin off its PayPal business as a separate company, despite owning less than 1% of the company.

Transcript

Caron has enough money to buy just about anything except of course dignity investor beat starts now thanks for watching I'm Chris Hill right across the board on Wall Street today the NASDAQ S&P 500 both falling and almost every single one of the 30 stocks in the Dow index in the minus column as well joining me in studio today David Hansen and Taylo... Read More

Key Insights

• 🙃 Carl Icahn's demand for eBay to spin off PayPal has attracted attention, even though he owns less than 1% of the company.
• 🛀 eBay's Q4 revenue showed significant growth, particularly in mobile payments and transactions outside of eBay.
• 🇭🇲 McDonald's, Netflix, Herbalife, and Noble Corp were all highlighted as companies experiencing various challenges and opportunities in their respective industries.

Questions & Answers

Q: Why is Carl Icahn calling for eBay to spin off PayPal?

While Icahn only owns less than 1% of the company, he believes that separating PayPal from eBay would unlock more value for shareholders and make sense strategically.

Q: Will eBay consider Icahn's demands?

eBay has publicly stated that it does not plan to spin off PayPal, citing the advantages of having both businesses together. However, it could potentially happen in the future if circumstances change.

Q: Is eBay fairly valued or overvalued?

It is difficult to determine, but Muckerman believes that eBay is performing well, especially with its growth in mobile payments and expansion beyond eBay transactions.

Q: What are the prospects for McDonald's in 2014?

While McDonald's saw a slight drop in global same-store sales, it is still well-positioned as an industry leader with a strong dividend and international growth potential.

Q: Is Netflix a safe bet for investment?

Netflix continues to grow its subscriber base and expand its business, making it a company that many would advise not to bet against. However, valuation remains a challenge.

Q: What is happening with Herbalife?

Herbalife's stock took a dive after a senator called for investigations into the company's business practices. It remains a polarizing stock, with opinions split on its potential as an investment.

Q: Why is Noble Corp's stock at a new low despite positive Q4 results?

Although Noble Corp reported good Q4 results, the stock is down due to the company expecting lower rig utilization in 2014. However, David Hansen remains optimistic about the industry's long-term prospects.

Summary & Key Takeaways

• eBay's Q4 revenue increased by 133%, but the focus was on Carl Icahn's call for a PayPal spin-off.

• David Hansen believes that while it may not happen in the timeframe Icahn hopes for, it could occur down the road.

• Taylor Muckerman highlights PayPal's strong growth in mobile payments and its success outside of eBay.