eBay Considering PayPal Spinoff

paypaleBay is considering spinning its PayPal business unit off into a separate business, potentially as soon as next year.

Rumours of the split, reported by tech news website The Information, caused shares of the online retailer to rise nearly four per cent to $55.48 (£33.46) at midday.

According to sources, candidates for the position of PayPal CEO were informed about the possible spinoff of the fast-growing payments unit. Previous CEO David Marcus left the position in June to head up Facebooks Messaging unit.

Activist investor Carl Icahn has previously campaigned for a separation of the two businesses, but has been resisted by eBay CEO John Donahoe, who has said the PayPal was integral to eBays business, and a split made no sense.

Icahn ended his campaign in April, saying that while he still supported a split, now was not the time, but other investors feel that PayPals growth is hampered by online retailers wariness of supporting a rival in the form of eBay.

How much of PayPal would be separated in such a move, and what structure it would take, has not been revealed, and neither eBay nor PayPal have confirmed that such a move is being considered.

“The board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both eBay and PayPal,” said eBay spokesperson Amanda Miller. “This position has not changed.”