LinkedIn Co-Founder Chooses Sides in Looming PayPal Proxy Fight

06 March 2014

A new voice has entered the ongoing argument between eBay’s CEO and activist investor Carl Icahn about the future of the payments wing of eBay Inc., PayPal. LinkedIn co-founder Reid Hoffman has come out in a blog post  to accuse Icahn of being short-sited and his plan to spin-off PayPal of being misguided.

Before LinkedIn, Reid was an executive vice president at PayPal and a key player in eBay’s initial buyout of the payment platform. He blogged yesterday.

“While PayPal is no longer a startup, it still has massive growth prospects. But to someone who isn’t investing in the long term, it’s just a cash cow that’s ready to be slaughtered. Icahn is determined to manufacture consent for a spin-off, then a sale, so he can make a quick profit on that PayPal premium.”

He further noted that while Icahn is arguing eBay and PayPal are fundamentally different and need t be separated, everyone else in the industry are rushing to create more integration and convergence.

In the end, Icahn’s stock in trade is trading stocks,” he concluded. “Silicon Valley’s stock in trade is creating powerful products and platforms. The former approach creates short-term returns. The latter approach creates economically productive ecosystems that spawn industries, jobs, products, and services that benefit society at large, and compounding profits for long-term shareholders.”

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