eBay Did Skype and PayPal Is Next??

eBay Did Skype and PayPal Is Next??
5 June 2010
EventHorizon1984

June 4th was a busy day for eBay stock traders as 56,354,674 eBay INC shares traded hands.  With an average trading volume of "19,149,300" shares was something up? 

Well, yes.  It was the usual games that stock analysts play with other people's (investor's) money.

But let's play the conjecture game, and suppose that analysts managed to figure out that eBay CEO John Donahoe telegraphs his moves.  A year in advance.

Take this news piece from 17 April 2008.

• ""What we're testing this year are the synergies," Mr Donahoe told the Financial Times this week after Ebay reported its latest earnings. "If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it." That could lead to the disposal of the business, he indicated."

About a year later, 14 April 2009, Henry Blodget wrote this:

• "eBay is finally dumping Skype... on the public market! Specifically, it's planning to spin the company out in an IPO next year."

Do you know what John Donahoe thoughts on PayPal were 24 September 2009?

• "EBay would consider that step if PayPal no longer had synergy with the parent company, Donahoe said at a conference in Las Vegas. He said he regularly asks himself whether eBay is hampering PayPal's development."

We'll take the long shot bet that around September 2010 eBay INC will make an exciting announcement about PayPal.  Such a move would be a short term win-win for eBay and PayPal.

Long term?  Well John Donahoe is all about synergy and never about the long term.

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"In the meantime, by announcing the deal now, it can get investors excited about the separation and try to goad potential acquirers into ponying up and buying Skype outright -- which is presumably part of the thinking here."
Henry Blodget

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