eBay CEO Departs Amid Corporate Shake-Up
eBay (NASDAQ:EBAY), the online auction company, announced today that the company’s Chief Executive Officer and President, Devin Wenig, is stepping down. The current CFO, Scott Schenkel, will adopt the mantle of interim CEO during this transition period as the company’s board of directors explores candidates to fill this post on a permanent basis.
Chairman of eBay board of directors, Thomas Tierney, extolled the efforts of the outgoing CEO in the following words: "Devin has been a tireless advocate for driving improvement in the business, particularly in leading the Company forward after the PayPal spinoff. Indeed, eBay is stronger today than it was four years ago. Notwithstanding this progress, given a number of considerations, both Devin and the Board believe that a new CEO is best for the Company at this time."
The press release has also revealed that eBay’s current VP Global Financial Planning and Analysis, Andy Cring, has been appointed as the interim CFO. Though the company did not provide a specific reason behind Mr. Wenig’s departure, the abrupt announcement might give rise to speculation regarding potential disputes between the departing CEO and the company’s board.
This corporate shake-up comes at a sensitive time for the company. Since early 2019, the San Jose-based enterprise has been involved in a strategic review following a formal agreement with the activist investor, Elliot Management Corp. In January 2019, the investor sent a letter to eBay executives that contained a five-tier plan to achieve a target stock price between $55 and $63 by the end of 2020. This target represents a capital gain ranging between 39 percent and 59 percent based on the stock’s closing price on September 24th 2019. The plan included monetization or sale of StubHub – the online ticket exchange company owned by eBay – as well as the company’s Classifieds business with the proceeds being used to revitalize the core auction business. Elliot Management also stipulated generous capital return structure for shareholders and the reversal of inefficient allocation of resources.
Once an e-commerce trailblazer, eBay has been experiencing a slump lately. Though the company has 182 million active buyers around the globe, its gross merchandise volume has been declining with the second quarter of 2019 witnessing a fall of 4.4 percent to $22.6 billion. Additionally, increasing competition in the face of new marketplaces like Facebook's (NASDAQ:FB) means that the somewhat venerable auction house has its work cut out for it. Consequently, eBay’s stock price sank from an intraday high of $46.99 on February 01st 2018 to a low of $26.01 on December 26th 2018. Since then, the stock price has increased by a whopping 52.1 percent – based on the September 24th 2019 closing price – largely on the back of the company’s ongoing strategic review. Consequently, the abrupt departure of Devin Wenig at this crucial juncture is bound to rattle the confidence of investors and will likely raise the specter of discord within the board of directors. Hence, at the time of writing, eBay’s stock price is down by 1.26 percent.