David Friedberg suggests a new trend of AI-native operators and activist investors targeting 'flaccid' digital companies like eBay and PayPal for buyouts and reinvention. This trend focuses on leveraging AI to optimize underperforming, post-founder internet platforms, potentially leading to significant M&A activity in the tech sector.
David Friedberg, co-host of the 'All-In Podcast,' identifies a new class of takeover targets: 'flaccid' digital companies that are profitable but operationally stale and under-optimized for AI. He specifically names eBay and PayPal as prime examples, citing their strong brand equity but lack of growth and inefficient operations. This trend, exemplified by Ryan Cohen's interest in eBay, suggests that AI-native operators and activist capital are looking to 'AI-ify' these businesses, leading to potential M&A activity. For traders, this presents an opportunity in identifying these underperforming digital assets, as a successful 'AI-ification' could unlock significant value, though execution risk remains high given the need for 'best of the best' operational talent.