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PayPal is splitting from EBay Inc. and will become a separate and publicly traded company next year. The separation is expected to occur in the second half of 2015. EBay said Tuesday that its board decided that the separation was the best path for growth and shareholder value creation for each business. After spending much of this year explaining why its two businesses are best left together, eBay's board of directors and CEO did a complete about-face Tuesday morning when they announced the plan.
CEO John Donahoe will step down as CEO of eBay once the split takes effect in 2015. Donahoe began 2014 under pressure from activist investor Carl Icahn to split the company into its faster growing payments business, PayPal, and its legacy e-commerce marketplace, eBay. Donahoe and eBay's board successfully resisted those pleas in winning a proxy fight, but only months later during the company's annual strategic review, decided that a split in 2015 is now the right move to position each of those company's for the future. Dan Schulman, the president of the enterprise growth group at American Express, will be the new president at PayPal, effective immediately.
-- CNBC's Mark Faber and The Associated Press