General Question

ibstubro's avatar

EBay announced that next year they will spin Paypal off into a separate, independent company. Can you tell us briefly how?

Asked by ibstubro (18765points) September 30th, 2014

Will stock holders get stock in both companies? Or are there different ways this can work?

I know someone that is interesting in buying Paypal stock when it’s offered.

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2 Answers

zenvelo's avatar

They usually issue stock in the new company to the current shareholders, and may (or may not) do an IPO at the same time to raise cash.

Or, they can do an IPO, issue stock, and the proceeds from the sale go back in to eBay. The current shareholders benefit because the company’s capital is increased by the cash from the sale.

There are lots of ways to do this; I haven’t read the details yet.

ibstubro's avatar

Thanks, @zenvelo. I’m not sure there are details at this point. It’s supposed to be next year they split.

I told a friend the news, and was met with a barrage of questions.

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