Why eBay may spin off Enterprise and PayPal

Global commerce platform and payments leader eBay (Nasdaq:EBAY) today reported that revenue for the fourth quarter ended December 31, 2014 increased 9% to $4.9 billion, compared to the same period in 2013. GAAP earnings were $936 million or $0.75 per diluted share, and Non-GAAP earnings were $1.1 billion or $0.90 per diluted share, driven by enabled commerce volume growth of 21%.

EBay Inc’s plans to break up into three different companies could accommodate would-be suitors, signaling a potential merger fight after the breakup.

The company plans to spin off its payments division, PayPal, from its core marketplace division in the second half of the year, making two standalone publicly traded companies that some analysts say could be worth more than the combined entity.

On Wednesday, eBay added that it will sell or prepare a public offering of its eBay Enterprise unit, which the company bought for $2.4 billion roughly four years ago.

The announced moves are intended to give each business the ability to consider all their alternatives, including a sale, eBay Chief Executive Officer John Donahoe said.

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