Starboard And eBay Escalate Boardroom Spat

There was plenty of boardroom drama on Thursday (March 19) between eBay and activist investor Starboard Value. The day started with Starboard nominating four new directors to eBay’s board, along with its a demand to find a new CEO. It ended with eBay firing back a strongly worded defense of its position.

“After extensive private discussions and engagement with Starboard’s representatives, eBay’s Board believes Starboard’s nominations are unwarranted and unreasonable, particularly in light of the decisive actions eBay has taken, and is taking, including a CEO search process that includes external and internal candidates,” eBay said in a late-afternoon statement. “Efforts have been positively received by our investors and market analysts. Starboard’s ‘campaign platform’ is constantly changing, and does not include useful suggestions or meaningful content.”

The statement went on to say that the company’s board includes a principal of a major activist investor (Elliott Management) as well as a director as agreed upon with Starboard a year ago.

The dustup is the latest chapter in a long-running feud between Starboard and eBay. Starboard has been urging the eBay board to jettison what it sees as ancillary businesses and to focus on its core. That pressure led to the sale of StubHub. Today, eBay objected to what it sees as Starboard’s lack of direction and impatience with actions such as selling its classifieds business.

Earlier in the day, Starboard said it had nominated the four new directors to eBay’s board, and asked the company to search for external candidates to fill its CEO job.

Then eBay fired back.

“It is unclear what Starboard is hoping to accomplish through the appointment of four more candidates, other than to create an unnecessary distraction and, as a relatively small minority investor, to obtain an outsized role on the Board,” the company said in a statement on Thursday (March 19). “Moreover, we are disappointed that Starboard has decided to announce its previously provided nominations amidst the global COVID-19 pandemic while the Board and management are trying to focus on the business, employee health and safety, and the important CEO search and portfolio review that are underway.”

The eBay statement also highlighted what it said were significantly improved margins and an increased focus on its Marketplace volume growth, as well as a  reorganization of the executive team and a customer-focused plan that includes improved vertical buyer experiences, more data and tools for sellers, and increased platform conversion.

Earlier this week, Investor’s Business Daily rated eBay’s stock at 96, meaning it outpaces 96 percent of all stocks when it comes to the most important stock-picking criteria.

The next move in the Starboard-eBay war remains to be seen. Q1 and Q2 have been interrupted by the COVID-19 virus, and the next meeting of the board of directors may need to be moved.

“We are pursuing a process to unlock value for eBay’s Classifieds business, and will provide an update to our shareholders by mid-year,” eBay said. “We are in active discussions with multiple parties.”