Profiting from a bad call

In Uncategorized on 13/05/2011 at 9:18 am

Meg Whitman, eBay’s former chief executive, blundered by buying Skype six years ago for US$2.5bn. Her idea that Skype, the Internet calling service, would encourage eBay’s users to talk to one another rather than chat by e-mail didn’t work out. EBay cut its losses by selling a 65% stake in Skype to investors.

Microsoft has now offered US$8.5 bn to acquire Skype. Long ridiculed for buying Skype, eBay will, in the end, likely profit from the deal by some US$800m, a 32% gain.

That’s life.

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