Today: eBay refuses to give in to Carl Icahn's demand to spin off PayPal, and activist investor fights back with accusations against CEO, board members. Also: Netflix hits record after Comcast deal, Facebook reaches all-time high after Zuckerberg talks WhatsApp.
The Lead: Carl Icahn gets personal as eBay refuses to spin off PayPal
A month after Carl Icahn began his campaign to have eBay spin off its PayPal online-payments company, the activist investor unleashed accusations of poor corporate governance and direct attacks against CEO John Donahoe and two board members Monday.
In an open letter to shareholders released Monday, Icahn stated that "the complete disregard for accountability at eBay is the most blatant we have ever seen," and directly called out Donahoe, Andreessen Horowitz co-founder Marc Andreessen and Intuit founder Scott Cook.
Andreessen received the most vitriol from Icahn, who described the venture capitalist as "routinely funding competitors while buying companies from eBay and reaping significant personal riches," citing eBay's sale of Skype to an investment group in which Andreessen Horowitz had a stake, which flipped it to Microsoft for twice the price less than two years later, as well as a handful of investments in companies that could be seen as competitive with eBay or PayPal.
Cook's involvement was questioned because his former company -- in which he still holds a sizable ownership stake -- has a similar product to PayPal in Icahn's estimation, called Intuit Go-Payment. Icahn also brought up the allegations of an illegal agreement among Silicon Valley companies not to poach each others' employees, saying that eBay agreed not to go after Intuit workers because of Cook.
Donahoe, meanwhile, was described by Icahn as "completely asleep or, even worse, either naive or willfully blind to these grave lapses of accountability and stockholder value destruction."
eBay responded with a blog post that described Icahn's letter as "mudslinging attacks against two impeccably qualified directors."
"Marc Andreessen and Scott Cook bring extraordinary insight, expertise and leadership to eBay's board, which is scrupulous in its governance practices and fully transparent with regard to its directors' other affiliations and businesses," the post read, adding that Donahoe "is widely respected for his turnaround of eBay and leadership of the company over the past six years."
Specifically, eBay noted that Andreessen was recused from any board discussion about Skype due to his fund's investment in the group seeking to acquire the company, and that investments in competing companies was quite typical for venture capitalists sitting on Silicon Valley boards. As for Cook, eBay said, "The overlap between Intuit and eBay is small," and the poaching case "is old news, any restrictions ended years ago."
Icahn, who said in a television interview later Monday that his investment in eBay has surpassed $1 billion, has turned his sights on Silicon Valley recently: He made big money from a Netflix investment even as the company was not bought out as he originally expected, and campaigned for greater investor return from Apple until giving up that attempt earlier this year.
eBay and Icahn are set for a showdown in April, when Icahn will put forward two of his employees for seats on eBay's board and shareholders could vote on a proposal to demand PayPal be spun off. eBay shares gained 3.1 percent to $56.73 as the two sides publicly sparred Monday.
SV150 market report: Facebook and Netflix again hit record highs
Silicon Valley stocks continued to establish new all-time highs Monday as Wall Street barely missing its own records, with the technology-heavy Nasdaq closing at its highest total since April 2000 and the broad-based Standard & Poor's 500 passing record levels before falling back at the close.
Facebook topped records it set last week in the wake of its $16 billion acquisition of WhatsApp, moving as high as $71.44 before closing with a 3.2 percent advance at $70.78. Facebook CEO and founder Mark Zuckerberg and WhatsApp CEO Jan Koum made their first big public appearances since the merger at the Mobile World Congress in Barcelona, Spain. Zuckerberg told attendees that the big-money deal was a long-term bet on the rapidly changing nature of the Internet, which Facebook's founder is also focusing on with his Internet.org drive. Earlier, Koum revealed that WhatsApp will add a voice service to its messaging platform, an addition he hopes to see in the second quarter.
Netflix also established record highs Monday, a day after the video-on-demand company announced an agreement with Comcast that will ensure broadband speeds fast enough to deliver the Los Gatos firm's streaming service. Netflix rose as high as $449.69 and closed with a 3.4 percent gain at $447 while reportedly nearing similar deals with Verizon Communications as well as AT&T. Other record prices in Silicon Valley on Monday were achieved by Google, which increased 0.7 percent to $1,212.51 while facing a lawsuit over Google Earth and reportedly preparing an operating system for smartwatches; Tesla Motors, which shot 3.8 percent higher to $217.65 while preparing to reveal more details about its battery factory; and Yelp, which gained 3.1 percent to $94.67 after moving as high as $97.23.
Apple gained 0.4 percent to $527.55 after answering security concerns over the weekend with silence; rival Samsung showed off its next round of gadgets at the Mobile World Congress. Oracle gained 0.1 percent to $38.14 after acquiring Sunnyvale startup BlueKai for a reported $400 million, adding to a cloud-marketing offering already supported by the purchases of Eloqua and San Bruno-based Responsys. Juniper Networks dropped 1.3 percent to $27.58 after Nokia denied interest in acquiring the Sunnyvale company, and larger rival Cisco Systems lost a penny to $22.12 while raising its first round of debt in three years. After a post-earnings drop last week, Hewlett-Packard gained 0.4 percent to $29.92 while introducing a new division aimed at the telecom enterprise.
Up: Palo Alto Networks, Tesla, LinkedIn, SolarCity, Netflix, Facebook, eBay, Yelp, SunPower, Symantec, Nvidia, SanDisk, Gilead, Intel, Adobe, Google
Down: Juniper, Twitter, Applied Materials, Electronic Arts, Workday, Cisco
The SV150 index of Silicon Valley's largest tech companies: Up 13.75, or 0.89 percent, to 1,564.13
The tech-heavy Nasdaq composite index: Up 29.56, or 0.69 percent, to 4,292.97
The blue chip Dow Jones industrial average: Up 103.84, or 0.64 percent, to 16,207.14
And the widely watched Standard & Poor's 500 index: Up 11.36, or 0.62 percent, to 1,847.61
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.