{ "media_type": "text", "post_content": "Hi everyone, could someone please help me understand how divestiture can be good for a company? e.g. why was it a good idea for ebay to split eBay and PayPal into two separate companies when PayPal is clearly an incredible business.\n\nThank you", "post_id": "61ce2d7b87dc7a002ff2652a", "reply_count": 5, "vote_count": 1, "bowl_id": "5b7c3919448e9300186d3deb", "bowl_name": "Private Equity and the Buy Side", "feed_type": "bowl" }

Hi everyone, could someone please help me understand how divestiture can be good for a company? e.g. why was it a good idea for ebay to split eBay and PayPal into two separate companies when PayPal is clearly an incredible business. Thank you

like
Posting as :
works at
You are currently posting as works at

Higher valuations as individual companies - eg mgmt is not distracted by the conglomerate, can grow better etc

like

Yep. B1 is accurate. When the sum of the parts is greater than the whole. Typically one business unit is doing significantly better than another and should be allowed to execute and grow on its own. The successful BU could be used to hide other things that should, in fact, be culled. You’ll get clearer financials after the divestiture.

like

Sometimes two BUs within a company become difficult to manage together and need to be broken out. Usually, it’s when the corp strategy for each BU becomes too heterogeneous. Eg PayPal & EBay businesses and end customers became so different that they decided that splitting apart would allow each company to grow to full potential

like

A change of relationship between primary and supporting business lines. When A industry to where the initially supporting business line belong starts to showing a different, a bigger growth path, it can realize better profitability when it’s separated. It requires different skill sets, visions, branding, hence a stronger attraction of right talents as well. Profitability from a synergy by keeping in-house now becomes < a standalone operation, risky but higher future income. Also hedging of the primary business line too. Now you have two income streams through investment shares from others industries you are only loosely related to.

like

Well… management needs to apply classic strategy: (a) if merged, divests; (b) if specialised, acquire. Kidding, in addition to the above, at times divestment helps generate financing to optimize the balance sheet (eg reduce the debt to equity ratio) to restructure the core of the company.

like

Additional Posts

Not crashing anymore.

like

test post from test

like

Post with company

like

Post without company

like

Linda fjfhfjf djjfjd djjfjd djjfjd djdjdjjd djdjjdjdjdj djdjd. Fend id didn't dish hen djdjdjjd did dishes djdjd djdjdjjd dj djdjd s djdjjdjdjjdjdjdndh do djdjjdjdjjdjdjdndh djdjdjjd djdjjdjdjdj djjjd

like

Post for likes

like

Ah now it did.

like

But once again not posting

like

Does anyone know if Systems Evolution Inc (SEI) performs drug test as part of their onboarding?

like

When's international men's day?

like

I just got my third remote full-time job, each making 175k and live at HCOL city. I love working remote and still have the best WLB although I’m still struggling on my finances. What am I doing wrong?

likefunnyhelpful

Partner came up to my cubicle today while my back was turned. Shouted my name which startled me. I audibly farted as a result - he then turned and walked away. Thanks Tuesday... 🍑💨👍🏻💁🏻

like

How to make 7figures a year by 25

like

Anyone here who left consulting and went back to industry? What do you love about your life now?

like

Is hiring cyclical at your firms and happens at a particular time of year?

like

Got my yearly Diamond 360 gift from Delta. Bottle of Glenlivet and Tiffany rocks glasses.

like

So there's all these affinity groups at work for Latinos, lgbt, etc. where's the affinity group for white males? Isn't that reverse discrimination?

like

Thinking of going to San Juan, PR for Labor Day weekend. Hotel recommendations?

like

So which peeps shelling out thousands of dollars here for NY private schools ? Anyone's kids in trinity ?

like

I’d like to be on a one-person engagement. Thanks

likefunnyuplifting

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
Download Fishbowl to see what others are saying
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the Fishbowl app

Get realtime notifications and see
what's happening in your industry
from the palm of your hand.

{ "isSet": true, "allowed": true }

Sign up for free to view this conversation on Fishbowl

By continuing you agree to Terms of Use and Privacy Policy.

Already have an account? Log in

For account settings, visit Fishbowl on Desktop Browser or

General

Legal