Monday, August 13, 2007

Speculation! - eBay Considering Spinning Off Minority Stake In PayPal!

"Ebay could be contemplating an IPO for a minority stake in its PayPal unit, according Stifel Nicolaus Internet analyst Scott Devitt."

This seems like wild speculation to me. eBay doesn't traditionally think this way so I think this post falls under wishful thinking but if you go on to read the article it does bring up an interesting point.

Devitt went on to say in a research note, “We believe a spin could be a component of a more significant shift in its business, towards the benefits of high-quality consumer credit and away from transactions as the sole source of revenue.

I've highlighted the section I find the most interesting. All of the signs, point towards eBay diversifying PayPal's business so as not to be dependent on transaction revenue, much the same as they have diversified the marketplace business by growing non-GMV business.

I think eBay is more likely to consider a complete spin-off of the company to maximize the value and avoid anti-trust issues rather than a partial spin-off.

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