Could eBay and PayPal split up?

It seems like a man we’ll be hearing more of this year in relation to eBay and PayPal is one Carl Icahn, an activist investor, who has previously thrown his weight around with Apple and Dell.

He’s now fixating on eBay Inc.. It’s reported that he has recently acquired at least 0.82% of eBay shares but some people say his holdings in the firm are more like 2%. That would make him a significant individual stockholder in eBay. He has also recently nominated two people to join the eBay board.

Icahn has an idea. Basically, he believes that PayPal should be spun off from eBay and become an independent company once more.

It strikes me as massively unlikely that he will succeed and it also doesn’t seem to be an attractive move. The union of eBay and PayPal has proved to be highly successful and it has also greased the wheels of ecommerce growth.

Separation would inevitably cause friction and make future integrations and developments more tricky. PayPal is, also, a huge profit area for eBay Inc. and it would be bizarre to let it go.

So what’s Icahn up to? Making more money. If PayPal were spun off he’d be a major owner of both PayPal Inc. and eBay Inc. and I imagine his calculation is that they will be worth more that way. Cha-ching.

We’ll see how this one pans out over the course of the year.