Negotiate to Silence, Not to Sell

“With the quiet period hovering over much of early 2002, PayPal could say little to defend itself publicly, so Hoffman and the executive team came up with another way of muzzling eBay. If they’re in negotiations to buy us, Hoffman remembered thinking, if they say anything to the public market, it’s breaking fiduciary responsibility. PayPal, the executive team and its board decided, would enter another round of acquisition negotiations with eBay—to silence it.”

“Few on the PayPal team saw that risk dissipating without a deal between the two companies, though. “Reid had a pithy means of describing the challenge: ‘Just because someone shoots five bullets at you and misses... does not preclude the sixth one from killing you,’ ” Keith Rabois wrote on Quora years later.”