Investor Carl Icahn is turning up the heat on eBay, attacking the online retailer's board as dysfunctional and blaming a key director for placing the company at a competitive disadvantage against a key rival.
Icahn has been pressing eBay's board to spin off its PayPal payment division to unlock shareholder value, which the company has rejected. He's also seeking to elect his own slate of directors.
After blasting CEO John Donahoe's "ineptitude" earlier this week, the billionaire says in a Wednesday letter to shareholders that eBay directors Marc Andreessen and Scott Cook aren't looking out for shareholder interests. EBay earlier sold a controlling stake in Skype to Andreessen and Silver Lake Partners investment group for about $1.9 billion, which was later sold to Microsoft for $8.5 billion.
Icahn, a legendary Wall Street fighter and at 78, still a force to be reckoned with when it comes to upending the corporate status quo, is an activist known for taking the gloves off in his battles with CEOs, boards and business rivals. Wednesday, the blows came down especially heavily on Andreessen and Cook.
"Message to the eBay board: Corporate governance failures do not have a shelf life," Icahn tells shareholders. "Whether this occurred 2, 5 or 10 years ago is irrelevant, especially when that board member is still on the board. The phenomenal payday for Mr. Andreessen and Silver Lake Partners raises serious red flags."
Icahn says that during Andreessen's time on eBay's board, he's had access to non-public information that's allowed him to invest and advise several direct competitors.
Icahn also blasted eBay for allowing Cook to remain as a director. Cook, a former Intuit founder and CEO who is also an Intuit director, owns nearly $1 billion in shares of Intuit -- a major PayPal competitor.
"Why is Mr. Cook still on the board of eBay?" Ichan asks. "Is it good for PayPal to have a competitor in the board room gaining insights into its operations, product pipeline and proprietary technologies?"
In a statement, eBay urged Icahn "to stick to the facts, Carl."
"Icahn doesn't let the truth get in the way of a good story. And while his letters and media interviews may be entertaining, they are not factually accurate. In fact, Mr. Icahn seems to be deliberately disseminating claims that are dead wrong. The claims against Mr. Cook and Mr. Andreessen, in particular, are blatantly false. We challenge Mr. Icahn to end his own charade with our shareholders. Let's focus on honest, accurate debate."
EBay says it kept a 30% stake in the Skype sale, and that in deliberations about its sale, Andreessen "recused himself from all deliberations on this transaction."
The company did not comment directly on Cook's Intuit stake.
EBay closed up 2% to $57.34 Wednesday.