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Is Carl Icahn Right About Paypal?

The company as a whole trades on a multiple of nine times next year's enterprise value divided by earnings (or ev/ebitida), which measures a company's return on investment. Meanwhile, the payment operators, like Visa and Mastercard ( MA ), trade roughly at 15 to 17 times next year's ev/ebitda, or around 40% higher than eBay. E-commerce sites also trump eBay's numbers with Amazon trading at around 33 timesnext year's ev/ebitida and Groupon ( GRPN ) trading at around 17 times. So what's with the lag? One reason may be that eBay confuses fund managers. Its revenue is divided between its marketplace business, which is growing at in the low teens, and its PayPal business, which is growing much faster at over 20%. When you have two disparatebusinesses growing at two different ratesunder one roof, you tend to scare away investors who usually look for more "pure play" businesses. Should eBay be part of a portfolio that focuses on e-commerce, or should it be in one that focuses on payment networks? Would it be considered a value stock or a high growth stock?

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