eBay and activitist investor Carl Icahn continue to duke it out in public with their latest tit-for-tat focused on the purchase and sale of Skype.
In an open letter to investors posted Monday, Icahn lashed out at eBay and board member Marc Andreessen for their mishandling of Skype. eBay bought the video chat service in 2005 only to divest it in 2009 to an investor group that included Andreessen's venture capital firm.
Icahn has accused Andreessen of a conflict of interest over the deal, challenging his claim that he recuses himself from any board discussions that involve companies backed by his firm. The activist investor also is nipping at Andreessen's heels over his perceived refusal to set the record straight and now wants to examine eBay's books on the Skype deal.
"We believe eBay and director Marc Andreessen have thus far refused to adequately clarify the public record," Icahn said. "Therefore, we are in the process of demanding an inspection of eBay's relevant books and records pursuant to our right as stockholders under Delaware law. We will attempt through our examination of these books and records to answer the above questions for ALL stockholders of eBay."
In its "The Truth About Skype" rebuttal, eBay tried to explain its Skype deal from acquisition to sale and responded to what it called Icahn's "made-up facts." During the 2009 sale of Skype, eBay CEO John Donahoe acknowledged that the purchase of the service failed to work out as planned. But in its statement Monday, eBay defended the sale of Skype and stood behind Andreessen's role in the deal.
Responding to Icahn's claim that the board "gave away $4.5 billion to a board member," eBay said that "the Silver Lake-led consortium, in which Andreessen-Horowitz held only a 3 percent interest, sold their stake of Skype to Microsoft for almost $6 billion, less what they paid for it, for a gain of slightly less than $4 billion for the consortium." That gain also followed the settlement of litigation over Skype, eBay added.
Andreessen himself dived into the battle on Monday with his own statement disputing Icahn's accusations and responding to the charges of a conflict of interest.
"Directors of all companies owe shareholders several duties, including the duty of loyalty," Andreessen said. "This duty focuses on avoidance or appropriate handling of conflicts of interest, and requires fair dealing by directors involved in transactions that could result in personal gain or financial conflicts with the company. To strengthen this duty and to further protect public company shareholders from potential conflicts of interest, directors are restricted in several different ways."
The war of words is likely to continue leading up to eBay's annual meeting in April. And Icahn couldn't resist a warning for the company.
"I have a message for eBay's board: You may be able to duck and weave when it comes to the media, but in a few short weeks you will have no choice but to face your stockholders at the annual meeting," Icahn said. "We all deserve to know the truth about what really happened with Skype."