Elliott Says eBay's Earnings Signal Urgent Need for Change

(Bloomberg) -- EBay Inc. announced earlier this week that it will start to pay a dividend in a move to appease investors. But activists want more.

Billionaire Paul Singer’s Elliott Management Corp. said EBay’s latest financial results only confirm its view that the online marketplace needs to make rapid changes to revitalize the business.

“EBay’s fourth-quarter earnings provided another example of why the company needs to significantly improve operational execution and focus on its core marketplace business,” Elliott, which owns more than 4 percent of EBay, wrote in a letter Thursday. “Despite a rapidly growing e-commerce market, EBay once again lowered marketplace growth expectations to a paltry 1 percent for 2019.”

Last week, Elliot proposed a five-step plan for revitalizing Marketplace, buying back shares and reviewing EBay’s portfolio of companies, including StubHub.

“Despite its remarkable history as one of the world’s largest e-commerce platforms, EBay as a public-company investment has underperformed both its peers and the market for a prolonged period of time,” Elliott wrote in a Jan. 22 letter.

In EBay’s earnings announcement Tuesday, Chief Executive Officer Devin Wenig issued the company’s first-ever dividend and added $4 billion to its stock repurchase program. He rejected for now the idea of selling ticket resale site StubHub or other pieces of the company.

While EBay’s profit forecast for the current quarter topped analysts’ estimates, investors have been concerned about lackluster growth for some time. Shares of the company are down about 18 percent over the past 12-months.

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