eBay CEO: Why we’re spinning off PayPal

Fortune

Seven months after making the case against spinning off PayPal to Fortune, eBay CEO John Donahoe is singing a different tune.

On Tuesday, eBay announced plans to spin-off online payments service PayPal into a separate, publicly traded company. Doing so, according to eBay, will help both businesses take advantage of new opportunities to grow in challenging markets.

The move comes months after activist investor Carl Icahn waged a public campaign for a PayPal spin-off. Icahn, who owns 30.8 million shares of eBay and is expected to make $180 million from today’s news, argued PayPal would grow faster and therefore be more valuable if cleaved from its parent company. (In March, Donahoe made the case that eBay and PayPal were stronger businesses together.)

But in an interview with Fortune on Tuesday, Donahoe, said the proxy fight earlier this year did not sway eBay’s board. Rather, the about-face came after…

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