eBay Issues Statement on Strategic Review Process for eBay Classifieds Group
SAN JOSE, Calif., Feb. 21, 2020 -- eBay Inc. , a global commerce leader that connects millions of buyers and sellers around the world, today issued the following statement regarding the previously announced strategic review of eBay's Classifieds Group ("Classifieds").
eBay has been exploring potential value-creating alternatives for Classifieds and continues to be in active discussions with multiple parties regarding a potential transaction. As previously noted, eBay expects to provide an update regarding this process by the middle of the year. eBay remains committed to maximizing the value of Classifieds for eBay shareholders.
The strategic review of Classifieds is part of eBay's broader portfolio review, which resulted in the successful sale of StubHub for $4.05 billion in cash.
"eBay's Board and management are committed to driving significant returns to shareholders by maximizing the value of Classifieds and positioning our Marketplace business for long-term success," said Scott Schenkel, interim CEO of eBay Inc. "The Classifieds review process, together with the StubHub sale and our initiatives to increase volume, revenues, margins, and cash flow while continuing to invest in long-term profitable growth, demonstrate this commitment. We are acting with urgency while focusing on the ultimate objective of maximizing the value of Classifieds."
In addition to eBay's portfolio review, the Company's management team has executed numerous value creating actions since the beginning of 2019 that are transforming eBay's business and strengthening its foundation for growth. Among others, these actions include:
- Scaled Managed Payments in the US and Germany; by 2022, Payments is expected to generate $2 billion of revenue and $0.5 billion of operating income;
- Delivered a point of margin improvement and committed to at least 2 additional points of margin expansion by 2022 while investing in revenue growth initiatives;
- Executed $5.0 billion in share buybacks and recently announced expansion of 2020 share buyback plan from $1.5 billion to $4.5 billion;
- Implemented eBay's first ever dividend and committed to a 14% increase in 2020;
- Increased focus on Marketplace volume growth with a reorganization of the executive leadership team and a re-prioritized customer-focused plan that includes improved vertical buyer experiences, more data & tools for sellers, and increased platform conversion leveraging an expanded structured data foundation.
eBay's Board and management team are confident that the above actions will help achieve the previously stated priorities for 2020 and position eBay for sustainable, profitable long-term growth.
Goldman Sachs & Co. LLC and LionTree Advisors LLC are acting as financial advisors to eBay on the strategic review of Classifieds, and Wachtell, Lipton, Rosen & Katz is acting as legal counsel.
eBay Inc. is a global commerce leader including the Marketplace and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity for all. Founded in 1995 in San Jose, California, eBay is one of the world's largest and most vibrant marketplaces for discovering great value and unique selection. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.
Forward Looking Statements
This press release contains forward-looking statements that are based on the company's current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of eBay Inc. and its consolidated subsidiaries, including the future growth in its business, operating efficiency and margins, reinvestments, dividends, share repurchases, and the expected timing of the announcements regarding the company's strategic portfolio review, including the timing and other expectations regarding the Classifieds review process. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to: changes in political, business and economic conditions, any regional or general economic downturn or crisis and any conditions that affect ecommerce growth or cross-border trade; the company's ability to realize expected growth opportunities in payments intermediation and advertising; the outcome of the strategic portfolio review; fluctuations in foreign currency exchange rates; the company's need to successfully react to the increasing importance of mobile commerce and the increasing social aspect of commerce; an increasingly competitive environment for its business; changes to the company's capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the company's share repurchases, or management of operating cash; the company's ability to increase operating efficiency to drive margin improvements and enable reinvestments; the company's ability to manage its indebtedness, including managing exposure to interest rates and maintaining its credit ratings; the company's need to manage an increasingly large enterprise with a broad range of businesses of varying degrees of maturity and in many different geographies; the ability to successfully intermediate payments on our marketplace platform; the company's need and ability to manage regulatory, tax, data security and litigation risks; whether the operational, marketing and strategic benefits of the separation of the eBay and PayPal businesses can be achieved; the company's ability to timely upgrade and develop its technology systems, infrastructure and customer service capabilities at reasonable cost while maintaining site stability and performance and adding new products and features; and the company's ability to integrate, manage and grow businesses that have been acquired or may be acquired in the future.
More information about factors that could affect the company's operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company's Investor Relations website at https://investors.ebayinc.com or the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the company on the date hereof. The company assumes no obligation to update such statements.
SOURCE eBay Inc.