The stock price of eBay Inc (NASDAQ:EBAY) surged by nearly 7% to more than $58 per share during the extended after-hours trading after the company revealed that activist investor Carl Icahn is seeking to break up the e-commerce company.

Carl Icahn Hologic

Carl Icahn wants to spin off PayPal

In his non-binding proposal submitted to eBay Inc (NASDAQ:EBAY), Carl Icahn said his firm and its affiliates has an economic interest of 0.82% in the e-commerce company after acquiring shares and derivative securities in the e-commerce company.

Carl Icahn proposed to spin-off PayPal, the payment business of eBay Inc (NASDAQ:EBAY) as a separate company. The activist investor also nominated two employees to the company’s board of directors.

Board rejects proposed separation

In response to the proposal of Carl Icahn, the board of directors of eBay Inc (NASDAQ:EBAY) said it welcomes the opportunity to listen to the perspective of all of its shareholders. According to the company, it will hand over Carl Icahn’s nominations to the corporate governance and nominating committee of the board of directors. The committee will consider the nomination during its ordinary course of business.

With regard to the proposed separation of the businesses of eBay Inc (NASDAQ:EBAY), the company said its board of directors routinely review their strategic direction and have conducted an in-depth evaluation of separating PayPal.

The board concluded that the current strategic direction is best for eBay Inc (NASDAQ:EBAY) and its shareholders, and breaking up the company is not the best way to maximize shareholder value.

The board explained that PayPal as part of eBay Inc (NASDAQ:EBAY) is able to take advantage of the company’s technological capabilities, commerce platforms, relationship with retailers, brands, and large merchants worldwide.  In addition, the board emphasized that payment is part of commerce, and PayPal as part of the company drives commerce innovation in payments on a global scale, thus creating value for consumers, merchants, and shareholders.

During the company’s conference call, John Donahoe, president and CEO of eBay Inc (NASDAQ:EBAY) said, “First, eBay accelerates PayPal’s success. Second, eBay data makes PayPal smarter. And third, eBay funds PayPal’s growth.”

According to eBay Inc (NASDAQ:EBAY). its management and board of directors remained focused on delivering sustainable results and driving long-term value to shareholders.

Fourth quarter financial results

During the fourth quarter of 2013, eBay Inc (NASDAQ:EBAY) said its revenue increased by 13% to $4.5 billion. Its net income (GAAP) was rose 14% to $850 million or  $0.65 per diluted share, an increase of 13%.  For the full year, the company said its revenue increased by 13% to $16.04 billion and net income rose 9% to $2.85 billion or $2.18 per diluted share.