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Activist Investor Letter Requests eBay Hire an Outsider CEO

By James Brumley - Mar 19, 2020 at 1:58PM

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Starboard Value is pleased with divestiture efforts so far, but is concerned a current eBay executive may lack the "fresh perspectives" needed to guide a turnaround.

Starboard Value LP continues to put pressure on online auction platform eBay (EBAY -2.34%), asking its board of directors in public letter delivered on Thursday to choose its new CEO from outside the organization. Additionally, Starboard confirmed in the letter it is aiming to pick four new directors for the 14-person board. One of its nominees is Peter Feld, a managing member and head of research for Starboard Value.

The move is just the latest chapter in a saga of tension between eBay and Starboard, which owns a little more than a 1% stake in the company.

Amid rows of uniformly colored blocks, a hand selects one that is different.

Image source: Getty Images.

Starboard, along with activist fund Elliott Management, jointly clamored for change beginning early last year, suggesting the company shed its classified ad business and focus on its consumer-facing e-commerce operation. In March of last year the two funds were able to add two new members of their choosing to eBay's board of directors. By November the company's event ticket reselling property StubHub was shed, and its classifieds operation was reportedly nearing a sale last month, before the coronavirus outbreak stymied the global economy.

Elliott and Starboard's efforts also likely played a role in the resignation of eBay's CEO Devin Wenig in September. CFO Scott Schenkel was selected as interim CEO, and a search for a permanent replacement for Wenig is under way. Starboard Value appears concerned about the direction that search may be headed, however, explaining in Thursday's letter that "eBay should be focused on identifying qualified external candidates in order to hire a new CEO that will bring a fresh perspective and energy" to the company.

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