In his quest to force eBay to spin off Paypal, activist investor Carl Icahn has nominated two of his own employees to the company's board. He wants them to replace current board members Marc Andreessen and John Cook, and in an open letter to shareholders, Icahn ripped into the duo, accusing them of putting their own interests ahead of eBay and manipulating the company's decisions for personal gain:
We have recently accumulated a significant position in eBay’s common stock because we believe there is great long-term value in the business. However, after diligently researching this company we have discovered multiple lapses in corporate governance. These include certain material conflicts of interest, which we believe could put the future of our company in peril. We have found ourselves in many troubling situations over the years, but the complete disregard for accountability at eBay is the most blatant we have ever seen.
Icahn lays out a laundry list of accusations against eBay's board members, including claims that at least two board members are directly competing with eBay, that one board member is demanding eBay cease hiring the most talented employees and that another board member is routinely funding competitors while buying companies from eBay and reaping significant personal riches.
eBay responded with its own letter to shareholders defending it CEO and board members and laying out a point-by-point rebuttal to Icahn's attacks. The battle between the two will likely continue to heat up as we get closer to the board election that could replace Cook. Unlike in his recent contest with Apple, in which Icahn backed down after getting part of the buyback increase he wanted, it's difficult to see how the sale of Paypal could be anything but total.