Activist investor Carl Icahn, who now holds 2% of eBay shares, told Forbes that he thinks eBay is holding PayPal back and damaging its value.
PayPal's former COO, David Sacks, and founder Elon Musk both agree with him and both believe a lone PayPal might, in the end, reach a valuation of more than $100 billion.
The idea would be to add to Paypal’s services to the point of turning it into a bank, a situation that would help Paypal take off but would also invite banking regulations that eBay would never abide.
With David Sacks and Elon Musk piling on, the reality of a Paypal spin-off from eBay may have received a significant boost. Last month, eBay CEO John Donohoe aggressively beat back the notion of separating Paypal from eBay, saying, “First, eBay accelerates PayPal's success. Second, eBay data makes PayPal smarter. And third, eBay funds PayPal's growth.” He also insisted the board was united on keeping the two enterprises together. Meanwhile, Icahn has nominated two directors.