eBay is 40% of the company it once was

eBay PayPal SpliteBay and PayPal are just three days away from becoming separate companies and just 6 days away from having each company’s shares set free on the stock market to rise and fall according to each company’s performance.

Shares have already started trading and currently Paypal Holdings Inc. are trading at $36.93 whilst eBay is trading at $26.77 giving the companies a combined value of $63.70.

What’s interesting here is that eBay is only worth about 42% of the current combined eBay plus PayPal business. PayPal looks without a doubt to be the runaway success here and it’s been true that for several years PayPal has always stormed to the rescue for the quarterly investor results.

eBay, once unshackled from the focus of growing PayPal, will need to revitalise and plan for future growth to keep investors happy and fend off any possible hostile takeovers. Currently eBay has a market cap of $76.46B, so when divorced from PayPal should have a market cap of around $30.58B. Compare that with Alibaba’s market cap of $203B or Amazon’s market cap of $216B and eBay starts to look like a minnow swimming in a sea of sharks.

eBay has two possible futures – One is under Devin Wenig and his plans for structured data drawn from Product Identifiers and Item specifics is a marketplace which prospers and grows. The unthinkable alternative is that the likes of Carl Icahn will once again flex his investor muscle to find a partner who will acquire or merge with eBay and just possibly the eBay name could disappear from the virtual world forever.

Personally I hope it’s the former – my online buying started with eBay as did my online selling. What do you think eBay need to do to stand on it’s own feet and prosper in a world without a PayPal partner?