Directors of online auction and e-commerce giant eBay Inc. on Friday formally approved previously announced plans to separate eBay from its big payments subsidiary, PayPal Inc. The separation becomes official July 17, when, under a stock distribution plan, eBay shareholders of record on July 8 will get one share of the newly independent PayPal for each share of eBay common stock they owned.
PayPal will then become a publicly traded company listed on the Nasdaq Stock Market under the ticker symbol PYPL. Trading on a so-called “when-issued” basis is expected to begin on or about July 6, but regular trading of PayPal’s common shares will start Monday, July 20, the first business day after the separation, according to an eBay release. San Jose, Calif.-based eBay will continue to trade on the Nasdaq under its current symbol, EBAY.
“EBay and PayPal are two great, special businesses,” John Donahoe, eBay’s current president and CEO, said in the release. “As separate, independent companies, eBay, led by Devin Wenig, and PayPal, led by Dan Schulman, will each have a sharper focus and greater flexibility to pursue future success in their respective global commerce and payments markets. I am confident that eBay and PayPal each have the right leadership team, strategy, structure and operational discipline to create sustainable, long-term value for stockholders and deliver great opportunities and experiences for customers worldwide.”
Schulman, a former American Express Co. senior executive, took over as San Jose-based PayPal’s president in September 2014 following the departure of previous president David Marcus for Facebook Inc., and will take the title of chief executive upon the separation. Donahoe will be chairman of PayPal’s board of directors.
The planned stock distribution still needs some regulatory approvals, including sign off from the European Central Bank, eBay said.
Friday’s announcement represents the impending culmination of a processes started by activist investor Carl Icahn, who agitated for the separation of the payments unit from eBay. Donahoe resisted at first, but then eBay’s top management agreed last September to begin work on an amicable corporate divorce. EBay bought PayPal in 2002.
PayPal had $8 billion in revenues last year, nearly as much as the $8.8 billion of its parent company, and processed $235 billion in payment volume through 165 million active customer accounts.