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eBay Rejects Icahn Nominees as Fight Goes to Shareholders

Stocks in this article: EBAY AMZN

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Earlier in March, former PayPal executive and current LinkedIn (LNKD) chairman Reid Hoffman published an extremely supportive letter of eBay's current strategy and accused Icahn of focusing on short-term trading profits over long-term growth. "It's classic market exploitation," Hoffman wrote.

Icahn quickly responded.

"We have not yet begun to fight," the activist wrote on a website he recently created to champion shareholder rights. In late February, Icahn filed a proxy solicitation to split PayPal from eBay and nominate two new directors to eBay's board at the company's annual shareholder meeting later in 2014.

Icahn has identified two board members, venture capitalist Mark Andreessen and Intuit founder Scott Cook and their perceived conflicts of interest as the flagpole for his campaign.

The activist has painted both Andreessen and Cook as the Manchurian Candidates of eBay's board, who've used their seats to invest in competitors to PayPal. Icahn said Intuit has benefitted from Cook's access to PayPal as it launches its own payment reader, and he also accused Andreessen of self-dealing in eBay's sale of Skype.

eBay founder and Chairman Pierre M. Omidyar rejected those assertions earlier in March and Andreessen took to his blog to reject Icahn's claims.

On Thursday, Andreessen categorically denied Icahn's allegations surrounding the Skype deal, which it is worth noting, eventually made money for eBay shareholders.

"Mr. Icahn is making up a fake conspiracy theory out of thin air," Andreessen wrote, citing a Wall Street Journal article that said Microsoft passed on Skype when eBay put it up for sale. Seventy percent of the business was sold to Silver Lake for $2.75 billion in 2009. In 2011, Silver Lake flipped Skype to Microsoft for $8.5 billion.

eBay shares fell over 1% in Monday trading to $58.22. Shares have gained over 6% year-to-date.

-- Written by Antoine Gara in New York

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