5 ms·

EBay is worst-run company I have ever seen: Carl Icahn

63 points by mathattack 13y ago

PaulHoule 13y ago
I can't remember the last time I bought or sold something on eBay. For any specific thing there is always some channel which is better, and that's the problem. As for PayPal let's just say I lived through the age of PCI Compliance when PayPal was the most common option if you needed to take credit cards for a small business and that experience will take a long time to live down.
- ROFISH 13y ago
  Also, PayPal seems to be a payment method of choice (of many) for teenagers who are unable to get a credit card.
- cwal37 13y ago
  I haven't bought anything on ebay proper in quite a while, although I occasionally buy books from half. However, my girlfriend buys a large quantity of good from eBay. These purchases seem to fall into two categories. 1. Clothing. In particular, very cheap dresses and clothes that are out of stock and discontinued on the brand's website. 2. Craft goods. Leather to make purses/wallets and scrap kimono silk are two examples that spring to mind immediately.
debt 13y ago
Carl Icahn gives a great talk as a guest lecturer in Robert Shiller's economic class from 2009: https://itunes.apple.com/us/podcast/15-guest-lecture-by-carl-icahn/id341651121?i=63752219&mt=2 https://itunes.apple.com/us/podcast/15-guest-lecture-by-carl... He talks about how many of these companies are run by fraternity presidents and their frat brothers. He calls it anti-Darwinian. You have this likable, but dumb, frat president coming in and becoming CEO. He theorizes that people who float to the top in companies are those who pose no threat and take no risks. So you have the dumb frat president will in turn appoint his frat brother, who subsequently is dumber than him and rose in ranks because he poses no threat to anyone, as his successor, and so on. He seems frustrated that many of these companies have no accountability, they essentially can do whatever they want. And many times, the smartest people don't float to the top as they should. So I see Carl Icahn coming in and giving these guys a hard time and can't help but think it's a good thing. Good shake em up a bit. But are activist investors like Carl Icahn actually a good thing? I mean it's great that they introduce a bit of corporate democracy, but does he actually improve the companies he takes a large position in?
- dopamean 13y ago
  I guess that would depend on your definition of improve. He is really most interested in 'improving' the value of his holding in the company so he can make a tidy profit for himself and his investors. I'm pretty sure he couldn't care less if the target company really 'improved' after he has liquidated his position. Edit: Also, one of the big things a lot of activist investors try to force companies to do is issue a larger dividend (or just issue one if the haven't) or buy back stock. These things are good for the shareholders not necessarily the company. It's important to remember that Icahn is a shareholder and is interested in taking care of shareholders not companies.
  - roc 13y ago
    It's important to remember Icahn is advocating what is good for his shares, not even "shareholders" in general. What he pushes for can be objectively bad for other shareholders whose positions aren't sufficiently similar to his own.[1] [1] Perhaps they bought higher, or wanted to hold longer, or were looking for a stable investment where Icahn is pushing higher-risk, etc.
    - burnte 13y ago
      You are completely correct. Icahn is a a billionaire because he's a great investor, but doesn't know squat about running companies, because he's never done it. His positions are always about "maximum shareholder value" when he's a huge shareholder, never when he has nothing to gain. He was a huge corporate raider in the 80s, buying companies and selling off their organs for a profit. The difference between Icahn and Romney is Icahn is even less likeable.
    - YokoZar 13y ago
      I'm not sure I buy this argument. Short-term shareholders and long-term shareholders both benefit from enhancing the long-term "permanent" value of a company, as you can always just sell some of the stock to realize those gains in a shorter time. Similarly, if you have drastically less risk tolerance than other shareholders, you are already throwing money away by being overinvested in a single stock. Shareholders who don't want Icahn to take risks with eBay stock shouldn't respond by demanding eBay be run conservatively, they should respond by diversifying their portfolio.
ChuckMcM 13y ago
Unlike Warren Buffet, Carl Icahn only buys into companies he thinks are run poorly. Usually he is able to push the company around to make a profit. He also thought Apple was pretty poorly run but he gave up[1] trying to convince others of that. [1] http://www.forbes.com/sites/genemarcial/2014/02/14/whats-up-with-carl-icahns-about-face-on-apple/ http://www.forbes.com/sites/genemarcial/2014/02/14/whats-up-... [1b] http://www.reuters.com/article/2014/02/10/us-apple-icahn-idUSBREA1913T20140210 http://www.reuters.com/article/2014/02/10/us-apple-icahn-idU... [1c] http://www.foxbusiness.com/investing/2014/02/11/icahn-apple-stock-is-extremely-undervalued/ http://www.foxbusiness.com/investing/2014/02/11/icahn-apple-...
- pgrote 13y ago
  Is this a recent change in perception concerning him? He bled TWA dry: http://en.wikipedia.org/wiki/Trans_World_Airlines#1990s http://en.wikipedia.org/wiki/Trans_World_Airlines#1990s
  - yesiamyourdad 13y ago
    I'm old enough that I still associate Carl Icahn with the phrase "Corporate Raider" that was popular during the 1990s. He's done a good job rehabilitating his reputation. Buffet would tend to buy a company that he can get a return on investment on. It's not to say he never sells companies, but he definitely tends to buy & hold. Whether or not a company is poorly run, as an employee I'd rather be bought by Buffet than Icahn. Buffet is in it for the long run.
- cjensen 13y ago
  It's not true that he buys "poorly" run companies. He buys companies where he thinks a simple change could make a big short-term profit for him, and then he lobbies for that profit. In Apple's case, Apple looked really smart in 2008 for having money in the bank when there was a cash crunch in money market funds and people had trouble getting short-term operating funds. They look smart when they use their funds to lock up a bunch of Flash Memory for their devices rather than buying as they need at higher prices. But Icahn didn't care about the long term advantages of the bank account to Apple. He just cared about trying to squeeze some of it out in the short term.
ap22213 13y ago
What are the top competitors to EBay?
- showerst 13y ago
  Amazon Prime and Craiglist for two. Nowadays Ebay is still the place to buy and sell specialty items, which will always be a multi-billion dollar market, but they've lost their position as the marketplace of the internet. If I were Ebay I'd also worry that thanks to Stripe it's quickly becoming much easier to become the marketplace for a given category, and beat Ebay via specialization.
  - alaskamiller 13y ago
    I've been on eBay since 2002. It's only in the past 6 months that I finally got how great eBay really is. Before I make any purchase on Amazon these days I always double check with eBay and ever single time eBay has been able to beat Amazon prices. With same if not better checkout experience, faster shipping prices and access to Asian marketplaces; it's the jumpoff point before I hit up DealExtreme or Alibaba. Plus no sales tax. Plus eBay bucks. But I'm hesitant on telling more people about this secret because I don't want the cheap prices to go away.
    - dublinben 13y ago
      I think it really depends on what you're buying, and what kind of quality you need. eBay is great for cheap electronics that don't really need to work, but I'm not going to buy my food there.
      - erdle2 13y ago
        I buy a ton of yogurt and eggs on eBay
      - alaskamiller 13y ago
        I buy new/used CPG, electronics, medicine, and food on eBay. On average 5% cheaper than Amazon. Business wise, eBay/PayPal makes 15% off transactions without having to spend on COGS or warehousing. It's incredible. Jeff Bezos lost. No one gets it yet.
Locke1689 13y ago
Andreesan seems to have a credible defense, but Ebay's excusal of Scott Cook (who is being investigated by the DOJ for antitrust action in a non-poaching agreement with his company Intuit) seems pretty damning.
gesman 13y ago
Never underestmiate the power of billionaire's boredom.
adventured 13y ago
This is pretty straight-forward: "The billionaire investor has been trying to get the online marketplace for months to spin off its PayPal platform from its Internet retail business." The longer eBay refuses, the more obnoxious and louder Icahn will get. He will say anything he has to about eBay to try to force them to do what he wants them to. That's his M.O. in dealing with boards. He's an actor that puts on an overly dramatic show, trying to lure other shareholders to his position (and it helps get media attention). This is not about whether eBay actually is the worst-run company ever (talk about dramatic), this is about trying to force eBay to spin off PayPal. Icahn believes that will unlock value for him, after which he'll sell out of eBay / PayPal at a profit and never look back. This fake concern about how eBay is run, will magically disappear from his list of priorities (ie he's nothing but a shark, and his post-sale behavior every-single-time proves that).
jcampbell1 13y ago
I knew Andreessen bought Skype from ebay, and flipped it to Microsoft for a massive profit. I had no idea he was on Ebay's board. That looks really bad no matter how you spin it.
NextUserName 13y ago
>The billionaire investor has been trying to get the online marketplace for months to spin off its PayPal platform from its Internet retail business. The poor billionaire is used to getting his way and now he is pouting and ranting... Sniff. I know two accountants that used to work for Ebay. By what they told me it is not poorly run at all. Not in any capacity. What single shred of evidence is there that EBay is the "worst-run" company he has ever seen? or even that they are tun badly at all? If it were the worst run company he had ever seen... how are they still in business? They should be hemorrhaging money and laying off employees. You'd think that corruption, scandal and theft would be rampant for such a poorly run company. Their servers would be down all the time, they would get hacked constantly and erase their data by accident without having backups. Their web IU would be unusable, their site would be full of bugs, they would be constantly being audited by the IRS, They would be in the business news daily for their constant blunders. This reeks of pouting and sour grapes.

63 points by mathattack 13y ago

I can't remember the last time I bought or sold something on eBay. For any specific thing there is always some channel which is better, and that's the problem. As for PayPal let's just say I lived through the age of PCI Compliance when PayPal was the most common option if you needed to take credit cards for a small business and that experience will take a long time to live down.

ROFISH 13y ago
Also, PayPal seems to be a payment method of choice (of many) for teenagers who are unable to get a credit card.
cwal37 13y ago
I haven't bought anything on ebay proper in quite a while, although I occasionally buy books from half. However, my girlfriend buys a large quantity of good from eBay. These purchases seem to fall into two categories. 1. Clothing. In particular, very cheap dresses and clothes that are out of stock and discontinued on the brand's website. 2. Craft goods. Leather to make purses/wallets and scrap kimono silk are two examples that spring to mind immediately.

debt 13y ago

Carl Icahn gives a great talk as a guest lecturer in Robert Shiller's economic class from 2009: https://itunes.apple.com/us/podcast/15-guest-lecture-by-carl-icahn/id341651121?i=63752219&mt=2 https://itunes.apple.com/us/podcast/15-guest-lecture-by-carl... He talks about how many of these companies are run by fraternity presidents and their frat brothers. He calls it anti-Darwinian. You have this likable, but dumb, frat president coming in and becoming CEO. He theorizes that people who float to the top in companies are those who pose no threat and take no risks. So you have the dumb frat president will in turn appoint his frat brother, who subsequently is dumber than him and rose in ranks because he poses no threat to anyone, as his successor, and so on. He seems frustrated that many of these companies have no accountability, they essentially can do whatever they want. And many times, the smartest people don't float to the top as they should. So I see Carl Icahn coming in and giving these guys a hard time and can't help but think it's a good thing. Good shake em up a bit. But are activist investors like Carl Icahn actually a good thing? I mean it's great that they introduce a bit of corporate democracy, but does he actually improve the companies he takes a large position in?

dopamean 13y ago
I guess that would depend on your definition of improve. He is really most interested in 'improving' the value of his holding in the company so he can make a tidy profit for himself and his investors. I'm pretty sure he couldn't care less if the target company really 'improved' after he has liquidated his position. Edit: Also, one of the big things a lot of activist investors try to force companies to do is issue a larger dividend (or just issue one if the haven't) or buy back stock. These things are good for the shareholders not necessarily the company. It's important to remember that Icahn is a shareholder and is interested in taking care of shareholders not companies.
- roc 13y ago
  It's important to remember Icahn is advocating what is good for his shares, not even "shareholders" in general. What he pushes for can be objectively bad for other shareholders whose positions aren't sufficiently similar to his own.[1] [1] Perhaps they bought higher, or wanted to hold longer, or were looking for a stable investment where Icahn is pushing higher-risk, etc.
  - burnte 13y ago
    You are completely correct. Icahn is a a billionaire because he's a great investor, but doesn't know squat about running companies, because he's never done it. His positions are always about "maximum shareholder value" when he's a huge shareholder, never when he has nothing to gain. He was a huge corporate raider in the 80s, buying companies and selling off their organs for a profit. The difference between Icahn and Romney is Icahn is even less likeable.
  - YokoZar 13y ago
    I'm not sure I buy this argument. Short-term shareholders and long-term shareholders both benefit from enhancing the long-term "permanent" value of a company, as you can always just sell some of the stock to realize those gains in a shorter time. Similarly, if you have drastically less risk tolerance than other shareholders, you are already throwing money away by being overinvested in a single stock. Shareholders who don't want Icahn to take risks with eBay stock shouldn't respond by demanding eBay be run conservatively, they should respond by diversifying their portfolio.

ChuckMcM 13y ago

Unlike Warren Buffet, Carl Icahn only buys into companies he thinks are run poorly. Usually he is able to push the company around to make a profit. He also thought Apple was pretty poorly run but he gave up[1] trying to convince others of that. [1] http://www.forbes.com/sites/genemarcial/2014/02/14/whats-up-with-carl-icahns-about-face-on-apple/ http://www.forbes.com/sites/genemarcial/2014/02/14/whats-up-... [1b] http://www.reuters.com/article/2014/02/10/us-apple-icahn-idUSBREA1913T20140210 http://www.reuters.com/article/2014/02/10/us-apple-icahn-idU... [1c] http://www.foxbusiness.com/investing/2014/02/11/icahn-apple-stock-is-extremely-undervalued/ http://www.foxbusiness.com/investing/2014/02/11/icahn-apple-...

pgrote 13y ago
Is this a recent change in perception concerning him? He bled TWA dry: http://en.wikipedia.org/wiki/Trans_World_Airlines#1990s http://en.wikipedia.org/wiki/Trans_World_Airlines#1990s
- yesiamyourdad 13y ago
  I'm old enough that I still associate Carl Icahn with the phrase "Corporate Raider" that was popular during the 1990s. He's done a good job rehabilitating his reputation. Buffet would tend to buy a company that he can get a return on investment on. It's not to say he never sells companies, but he definitely tends to buy & hold. Whether or not a company is poorly run, as an employee I'd rather be bought by Buffet than Icahn. Buffet is in it for the long run.
cjensen 13y ago
It's not true that he buys "poorly" run companies. He buys companies where he thinks a simple change could make a big short-term profit for him, and then he lobbies for that profit. In Apple's case, Apple looked really smart in 2008 for having money in the bank when there was a cash crunch in money market funds and people had trouble getting short-term operating funds. They look smart when they use their funds to lock up a bunch of Flash Memory for their devices rather than buying as they need at higher prices. But Icahn didn't care about the long term advantages of the bank account to Apple. He just cared about trying to squeeze some of it out in the short term.

ap22213 13y ago

What are the top competitors to EBay?

showerst 13y ago
Amazon Prime and Craiglist for two. Nowadays Ebay is still the place to buy and sell specialty items, which will always be a multi-billion dollar market, but they've lost their position as the marketplace of the internet. If I were Ebay I'd also worry that thanks to Stripe it's quickly becoming much easier to become the marketplace for a given category, and beat Ebay via specialization.
- alaskamiller 13y ago
  I've been on eBay since 2002. It's only in the past 6 months that I finally got how great eBay really is. Before I make any purchase on Amazon these days I always double check with eBay and ever single time eBay has been able to beat Amazon prices. With same if not better checkout experience, faster shipping prices and access to Asian marketplaces; it's the jumpoff point before I hit up DealExtreme or Alibaba. Plus no sales tax. Plus eBay bucks. But I'm hesitant on telling more people about this secret because I don't want the cheap prices to go away.
  - dublinben 13y ago
    I think it really depends on what you're buying, and what kind of quality you need. eBay is great for cheap electronics that don't really need to work, but I'm not going to buy my food there.
    - erdle2 13y ago
      I buy a ton of yogurt and eggs on eBay
    - alaskamiller 13y ago
      I buy new/used CPG, electronics, medicine, and food on eBay. On average 5% cheaper than Amazon. Business wise, eBay/PayPal makes 15% off transactions without having to spend on COGS or warehousing. It's incredible. Jeff Bezos lost. No one gets it yet.

Locke1689 13y ago

Andreesan seems to have a credible defense, but Ebay's excusal of Scott Cook (who is being investigated by the DOJ for antitrust action in a non-poaching agreement with his company Intuit) seems pretty damning.

gesman 13y ago

Never underestmiate the power of billionaire's boredom.

adventured 13y ago

This is pretty straight-forward: "The billionaire investor has been trying to get the online marketplace for months to spin off its PayPal platform from its Internet retail business." The longer eBay refuses, the more obnoxious and louder Icahn will get. He will say anything he has to about eBay to try to force them to do what he wants them to. That's his M.O. in dealing with boards. He's an actor that puts on an overly dramatic show, trying to lure other shareholders to his position (and it helps get media attention). This is not about whether eBay actually is the worst-run company ever (talk about dramatic), this is about trying to force eBay to spin off PayPal. Icahn believes that will unlock value for him, after which he'll sell out of eBay / PayPal at a profit and never look back. This fake concern about how eBay is run, will magically disappear from his list of priorities (ie he's nothing but a shark, and his post-sale behavior every-single-time proves that).

jcampbell1 13y ago

I knew Andreessen bought Skype from ebay, and flipped it to Microsoft for a massive profit. I had no idea he was on Ebay's board. That looks really bad no matter how you spin it.

NextUserName 13y ago

>The billionaire investor has been trying to get the online marketplace for months to spin off its PayPal platform from its Internet retail business. The poor billionaire is used to getting his way and now he is pouting and ranting... Sniff. I know two accountants that used to work for Ebay. By what they told me it is not poorly run at all. Not in any capacity. What single shred of evidence is there that EBay is the "worst-run" company he has ever seen? or even that they are tun badly at all? If it were the worst run company he had ever seen... how are they still in business? They should be hemorrhaging money and laying off employees. You'd think that corruption, scandal and theft would be rampant for such a poorly run company. Their servers would be down all the time, they would get hacked constantly and erase their data by accident without having backups. Their web IU would be unusable, their site would be full of bugs, they would be constantly being audited by the IRS, They would be in the business news daily for their constant blunders. This reeks of pouting and sour grapes.