Following an Information report that eBay could spin off PayPal as soon as next year, Keith Rabois, a former PayPal exec and current venture capitalist, told Bloomberg that he definitely thinks that eBay and PayPal should split.
He also provided another novel suggestion: That eBay should just rebrand itself as PayPal.
“Change the logos, change the paint, change the T-shirts, and you get the same value basically as spinning off PayPal,” he says. “Just rename the company. It’s a really simple solution. You could do it in probably 24 hours. A lot less financial gimmicks involved, you don’t have to hire investment bankers, and various other things, but you get all the benefit. The market cap will appreciate PayPal if you just change the brand.”
Rabois argues that rebranding would clarify PayPal’s value proposition to the world. Right now, he says, it feels like a subsidiary of eBay and people still think of it that way internally. He went as far as to say that employees “still think of themselves as hostage to the eBay marketplace, which is a declining and eventually irrelevant marketplace.”
Rabois, part of the famed group of early employees called the “PayPal Mafia,” also argued that eBay and PayPal should split earlier this year. At that point, activist investor Carl Icahn was publishing open letter after open letter demanding that the two companies split. The Icahn-eBay fight finally ended when eBay agreed to Icahn’s suggestion to appoint David Dorman to its board.
eBay’s stock soared after The Information published its report.
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