ICE is a Fortune 500 company that owns various global exchanges and clearing houses. In a statement released Thursday regarding its bid to purchase eBay, the company said, “Based on investor conversations following today’s ICE earnings call, ICE has decided to cease exploring strategic opportunities with eBay.”
The Wall Street Journal had reported on Tuesday that ICE was in talks to purchase the online marketplace for more than $30 billion. The deal would have valued eBay nearly at $2 billion more than its market capitalization.
At ICE’s earnings call, the CEO of the company Jeff Sprecher told analysts eBay was ‘not interested.’ He said, “Curiosity, and the fact that we know people there, led us to open a dialogue. And that’s kind of the end of the story.”
Why It Matters
On Tuesday, the news of ICE’s bid evoked a different reaction from investors, eBay shares rose nearly 10% during trading hours, while ICE shares plunged 7.5%. In a comment made to Barron’s Christopher Harris, senior analyst at Wells Fargo said, “There is concern among some investors about a potential ICE for eBay transaction.” He added, “we have no idea what ICE was proposing or how far those discussions went.”
ICE’s interest in eBay is a reflection of exchanges looking to diversify as retail commissions fall towards zero. Other exchanges like Nasdaq are finding newer streams of income like selling software as well.
eBay shares traded 6.18% lower at $35.65 in the after-hours session. On Thursday, eBay shares had closed 2.36% higher at US$ 38.00.
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