http://blogs.barrons.comAugust 13, 2007
by Eric SavitzEbay could be contemplating an IPO for a minority stake in its PayPal unit, according Stifel Nicolaus Internet analyst Scott Devitt.
“We believe eBay, for some time, has been contemplating a minority spin of its PayPal business,” Devitt wrote in a research note today. “We believe a spin could be a component of a more significant shift in its business, towards the benefits of high-quality consumer credit and away from transactions as the sole source of revenue.”
Devitt estimates that PayPal accounts for about $7 billion to $9 billion of eBay’s roughly $48 billion market cap; he thinks the company could be worth $15 billion on a stand-alone basis “if it pursued the credit opportunity.”
Devitt thinks the company may eventually get pushed by the market to take steps to in this direction. “We believe the probability of eBay being proactive is less than 50% and that it may be the market that forces eBay’s hand,” he writes.
Today, eBay is down 69 cents at $35.31.
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