Icahn’s Open Letter to eBay Subsidiaries

Carl C. Icahn, a shareholder of eBay, has released an open letter to the stockholders of the company. In his letter, Icahn stated that eBay shareholders should “stay the course and buy Class A shares.”

Non-voting shares

Before establishing the current voting system, EBay used the cumulative voting system to elect its directors. However, that system is not always effective. For example, if eBay holds 24.9% of craigslist, then it cannot unilaterally elect a director for the company. As a result, eBay implemented a corporate governance structure that was unfavorable to the company. The majority shareholder now holds 24.9% of eBay’s voting stock.

Class B Shares

The Purchaser may purchase EBAY shares today or wait for a later date. EBAY stocks trade through eToro USA Securities Inc., a FINRA and SIPC-registered broker-dealer. The EBAY stock graph allows you to follow the company’s stock price. There are low trading costs, including no commissions. You can buy EBAY shares online using eToro USA LLC, which offers many other investments.

Class C Shares

A shareholder who owns Class C shares of eBay subsidiaries can exercise his or her right to redeem them in the event that eBay decides to sell them for less than fair market value. In August 2004, eBay becomes a minority shareholder in craigslist, Inc., a classified ads service. Immediately, eBay shares drop below par. In addition, the class C share price falls to a three-year low.

Class D Shares

Craigslist, an eBay subsidiary, is a third-party shareholder. Craig and Jim, who own a majority of the Class D shares, cannot unilaterally elect a director. The company’s cumulative voting rules require minority stockholders to hold a minimum of 25% of the company’s shares in order to elect a director. However, the eBay shareholders have the right to vote for the director of craigslist.