I always think of eBay as a scavenger hunt type of site which is totally unfair. I know that. I apologize.

But one of the things that I admire about eBay is the wisdom of their acquisition of PayPal back in 2002.

Back in 2002, eBay bought PayPal for $1.5B which turned a lot of heads. Wow! Unicorn meat! How do you cook it?

eBay bought PayPal because they envisioned themselves as the leader in the online auction marketplace while PayPal was considered a similar market leader in the online payment market.

eBay had also been wrestling, unsuccessfully, with its own online payment system.

Fast forward to 17 July 2015 when eBay spun off PayPal as a publicly traded company delivering the shares to the existing shareholders of eBay. You may recall that activist Carl Icahn called for this spinoff as a means to unlock value within eBay.

The transaction was worth $40B, a huge value multiplier from the original cost of $1.5B. In a thirteen year period, under eBay’s stewardship, the $1.5B acquisition of PayPal delivered $40B in value. PayPal also put eBay in the online payment business and fixed eBay’s internal problems.

But, the comparison and the journey is even more impressive. The market cap of PayPal today is $124B.

Original eBay price to acquire PayPal in 2002: $1.5B

eBay spinoff of PayPal value to shareholders in 2015: $40B

PayPal market cap in 2019: $124B

This is a huge success story. As it turned out, Carl Icahn was right, but, most importantly, eBay was a shrewd investor and delivered gobs of shareholder value. They are not just a scavenger hunt auction site.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be well.