Last week Wall Street was buzzing with rumors about a possible deal between Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and eBay Inc (NASDAQ:EBAY). Both companies denied the rumor, and Piper Jaffray analyst Gene Munster doesn’t believe it at all, according to his latest report.
Where did the eBay – Google rumor come from?
It’s unclear exactly where the rumor about Google buying 40% of eBay came from. It was said that the search giant was paying $68 per share for that stake in the online auction company. MarketWatch was one of the first to report it, and the website did not say where that rumor came from. It also popped up on investor chatter websites like Stock Twits.
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Some media reports linked the rumor with Apple Inc. (NASDAQ:AAPL)’s unveiling of its long-awaited payments system. It was said that the two companies were waiting to hear more details about Apple Pay before announcing a deal.
Munster doesn’t think Google will buy eBay
In his report this morning, Munster called the rumor “largely unsubstantiated,” adding that he sees it as “unlikely that Google will purchase eBay.” He also noted that there were conflicting reports of the rumor and called it “likely false.”
The analyst did suggest that Google might buy PayPal from eBay but also said that seems like a bit of a stretch as well. Activist investor Carl Icahn has been pressuring eBay to spin off PayPal into a separate company, but eBay management has been unwilling to do so. It seems unlikely that they would want to sell PayPal either.
In addition, Munster doesn’t see any reason for Google to buy part of eBay or its PayPal segment. The company already offers its own digital wallet, although it has been largely unsuccessful so far. Munster suggests that Google would be better off spending some cash on marketing Google Wallet. He added that the company could partner with eBay to integrate PayPal into Android better. Also if Google owned PayPal, it would be nearly impossible for PayPal to partner with Apple Pay.