If activist investors do one thing well, it’s use hyperbole to talk up the price of a stock.

Activist investor Carl Icahn, who owns less than 1% of eBay Inc (NASDAQ:EBAY), is perhaps a master of the craft.  In calling eBay’s board of director’s “dysfunctional,” and saying “it’s time to end the charade,” Icahn continues to build drama as the stock price continues to climb.  Roughly six months ago eBay was trading at nearly $50 per share, today it is near $57, up nearly 1.67 percent on the day alone.

ValueWalk has been documenting the activist investor’s moves with eBay Inc (NASDAQ:EBAY) since he started to launch into a high profile crusade to spin off PayPal from e-Bay, to eBay’s attempts to beat Icahn at his own game of PR.

But today Icahn’s attacks got personal.

Carl Icahn
Carl Icahn image via FBN

Icahn personally attacks CEO, two board members

Icahn specifically called out eBay Inc (NASDAQ:EBAY) CEO John Donahoe and board members Marc Andreesen and Scott Cook, saying they are “value-driven for themselves.”

“We raised what we consider to be serious and direct questions regarding corporate governance at eBay, with particular focus on the conduct of CEO John Donahoe and directors Marc Andreessen and Scott Cook,” the letter to shareholders reads, then it mentions a reply eBay had sent Ichan regarding questioning of the board members.  Icahn claims that eBay “cherry picked old news clips” that “informs us that Mr. Andreessen and Mr. Cook are ‘two of the most respected, accomplished and value-driven technology leaders in Silicon Valley.’   There is no question that they are accomplished and value-driven, but we believe the primary problem, among other things, is that they appear to be value-driven for themselvespersonally profiting while costing eBay Inc (NASDAQ:EBAY) stockholders at least $4 billion,” Icahn’s letter reads.

One board member bought Skype from eBay then sold it 18 months later for a $4 billion profit

Then Icahn tears into the meat of his claim when he says “Corporate Governance Failures Do Not Have a Shelf Life,” and then refers to the sale of Skype to eBay board member Andreessen.  In that sale, eBay sold Skype to Andreessen for nearly $1.9 billion and then 18 months later, Andreessen turned around and sold Skype to Microsoft for $8.5 billion.

“The phenomenal payday for Mr. Andreessen and Silver Lake raises serious red flags,” the letter reads, hitting on its most serious point. “It is therefore particularly galling that management continues to hold this transaction out as an example of the board acting ‘objectively.’ Further, from where we sit, the fact that a similar set of circumstances happened again in the case of Mr. Andreessen’s investment in Kynetic, which netted $150 million in paper profits for Mr. Andreessen, shows a troubling pattern at eBay.”

Icahn says eBay board member is competitor of the firm

Next the letter rips into the board membership of Cook, again raising a logical concern.  “We questioned whether Mr. Cook should remain on the eBay board since Intuit (a company in which Mr. Cook owns nearly $1 billion in stock) and PayPal are fierce competitors,” the letter noted.  “Stockholders:  Please ask yourself: If you ran your own company, would you ever allow your competitors to sit at the table as you planned and executed your business strategy?”

Icahn’s original charge of the board being “dysfunctional” may be a little off base.  The board is functional, Icahn’s charge is that it is functioning in the board member’s self interest.  While Icahn raises strong points and this saga is just getting started, one thing remains clear: he knows how to create drama to move a stock price higher.