Carl Icahn, the eBay investor who for months had been trying to convince U.S.-based online marketplace eBay Inc. to spin off its PayPal payments unit, apparently got fed up with eBay’s resistance. Instead of continuing to negotiate in the press, Icahn on April 1 acquired eBay entirely and, in a bit of irony, now says he plans keep PayPal as well. “Yeah, I’m getting this whole integration thing now. It’s kinda cool and definitely has its benefits,” Icahn declared.
In a separate, simultaneous deal, Icahn on April 1 also acquired China online marketplace Alibaba, and he said he plans to rename the two acquired companies AlibabaBayPay. Icahn appointed Marc Andreesen CEO of the new tongue-twister, following an agreement to make Bitcoin the preferred currency on eBay and to include Bitcoin in PayPal. Andreessen got Icahn to pay him 20,000 bitcoins a year, which unfortunately for Andreessen is only worth $6.92 a year following the recent collapse of the Bitcoin bubble. But Andreessen, in a prepared statement said, “well, it could have been worse, it could have been $4.50. I’m still a believer.”
Reaction to the moves was expectedly mixed. Warren Buffett, with whom Andreessen has sparred publicly over the relevance of Bitcoin, equated the moves by Icahn and Andreesen as an “attempt to reinvent the toilet,” an apparent stab at Andreeson’s recent lumping in of Buffett with other Bitcoin critics as “old white men crapping on a new technology they don’t understand.”
“At least it isn’t a mirage, I understand,” Buffett said about the formation of AlibabaBayPay. “The deal terms stink, but they’re big boys. They’ve made their bitcoin beds, and so they’ll have to lie in them.”
Terms of the deals were not disclosed, and the acquisitions are pending legal and regulatory approvals. In unusual although really weird agreement both the U.S. and Chinese governments have opposed the deal over spying concerns. According to Ed Snowden, whom PYMNTS talked to from Russia, “Yeah, that’d probably happen,” acknowledging the use of these new rails to track just about everything that anyone online could, would or might even think about buying.
The Chinese government had thought Alibaba’s plans to go public in the U.S. would be yet another way for a Chinese company to steer more U.S. dollars into China, which already has earned trillions in loan-interest payments from the U.S. Those leaders apparently miscalculated just how much money Icahn had available to invest and didn’t realize he would buy Alibaba outright.
“We’re going to contest this deal all the way to the bank,” said one Chinese official who requested anonymity. “This wasn’t part of the plan.”
Andreesesen also fired back that it’s too bad Buffett and others who believe Bitcoin is a fad don’t understand how frustrated folks are globally with the existing, aging payment-commerce schemes. “We’ve brought the two major online marketplaces together with a leading alternative digital wallet that creates something that can fix the fraud and other problems of the world in one quick swoop,” he said. “Now Visa and MasterCard will have to negotiate deals to ride our rails,” apparently forgetting that much of PayPal’s activity flows over the Visa and MasterCard networks.
Visa’s PR representatives, apparently thinking this was an April Fools joke, declined to comment. MasterCard said the move was “priceless,” but that’s what they say about everything.
Icahn responded with only a short statement. “I’m going to get even richer, and now I see what eBay meant about keeping PayPal intact with the company. No way I’m going to spin it off. It’s all mine.”
A new company within AlibabaBayPay also would serve as a Bitcoin exchange, thus creating the potential for an entirely in-house payment system similar to what Apple has done with its iTunes Store. No word on whether AlibabaBayPay would venture into the mobile-device business, but some analysts were speculating that the company had such ambitions in mind. It’s rumored that such a device business would be named Mo’AlibabaBayPay.
The above is part of PYMNTS annual April Fools edition and should not be mistaken for serious or factual coverage. This is all in good fun, please don’t cite us.
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