posted on January 25, 2005 08:57:09 AM new
Here is today's stock info for Ebay. Tsk, tsk!!
EBAY INC (NasdaqNM:EBAY) Delayed quote data Edit
Last Trade: 81.006
Trade Time: 11:39AM ET
Change: Down 1.364 (1.66%)
Prev Close: 82.37
Open: 83.20
Bid: 81.00 x 1500
Ask: 81.01 x 500
1y Target Est: 102.00
posted on January 25, 2005 09:47:31 AM new
I can't help but be happy about this. I know it's vindictive of me--but the devil makes me do it.
___________________________________
Is it true that the only difference between a yard sale and a trash pickup is how close to the road the stuff is placed?
posted on January 25, 2005 09:54:57 AM new
Roadsmith...
Keep in mind that eBay didn't really need the money when they raised the fees. What'll they do to the fees if they ever get into a position where they actually NEED to raise money?
Yeah, it's nice to see them be put in their place, but it's also good to watch what you wish for because you just never know...
--------------------------------------
Replay Media - The best source for board games, card games and miniatures on the web! http://www.replaymedia.com
posted on January 25, 2005 10:09:09 AM new
They certainly needed the money for the last quarter. They pulled money from my card twice in December, 15 days apart. It all had to look good for the stockholders. When I questioned it, they said that it was a computer glich. Yeah right.
posted on January 25, 2005 10:58:45 AM new
I'm not happy, and I don't invest in individual stocks anymore. I think a stronger ebay company is better for sellers, a weaker ebay company can not really be better. The stock slide has nothing to do with fee increases, it has to do with the reality that ebay isn't going to be growing as much in the near future as it has in the recent past.
posted on January 25, 2005 11:25:56 AM newThe stock slide has nothing to do with fee increases, it has to do with the reality that ebay isn't going to be growing as much in the near future as it has in the recent past.
ebayvet - if it has nothing to do with fee increases, then please enlighten us. And maybe eBay isn't going to grow as much in the near future as it has in the past because fewer people will be using their services perhaps? Wouldn't fee increases/fewer auction listings have a lot to do with declining stock? Please help us understand.
posted on January 25, 2005 11:58:07 AM new
They are probably getting closer to market saturation. After all, haven't we seen loads of posts over the past six months about sagging sales?
Unless a stock is producing dividends, a lot of its value is based on what investors think a stock is worth, and that can, in many instances, have a distance from how the company itself is doing on a day-to-day basis.
Many think eBay stock is over-valued, and that may be true, but I think it is still amazing that a company can generate that much cash when for practical purposes, they own few tangible assets and have comparatively few employees.
Over all, I'd rather own eBay stock than Krispy Kreme!
posted on January 25, 2005 12:27:36 PM new
Their quarterly profit jumped 44%! Think about this cta - Wouldn't you think the reaction of an investor push the stock HIGHER if it was a reaction to the fee increase, after all that should equate to increased revenue (yeah, people are talking about leaving, but quite honestly those are very marginal customers for ebay, I bet very few powersellers would consider moving to bidville to counter this increase)
It is unlikely that they will see 44% growth in the near future, hard to match really. That with an over valued stock (look at their PE ratio, it is way out of whack, not like the dotcom boom days, but still very high) and that is why the price of stocks are adjusting to lower levels. It really does have nothing to do with the fee increases, most of the people buying stock have no idea how much it costs to sell online.
posted on January 25, 2005 12:37:50 PM new
The stock slide has nothing to do with fee increases, it has to do with the reality that ebay isn't going to be growing as much in the near future as it has in the recent past.
.
.
.I'll let you know why the stock decline has nothing to do with the fee increases. Wall Street actually like to hear certain things from a company that make them think things will be better than they are already expecting. Fee increases....the fact that a company feels that it can raise fees, and obviously do so in a way that will produce even more income...is good. Another good sign for Wall Street is Layoffs....when a company fires 10000 people...this is lousy for the 10000, but Wall Street loves it....stock rises. When a company announces lower fees, like Delta Airlines recently, this is usually interptreted as a bad sign for Wall Street, and the stock drops....but the people who are paying the lower fares are happy.
.
.The bottom line is that the stock dropped because Ebay did not grow as fast as had been expected in last year's fourth quarter....and also announced that they expect to grow this year at a slower rate than had been previously reported. Now, if the fee increases do not work out for Ebay....and if overall their profits over the next year are even less than they announced last week...then you can say at that point.....a year from now.... that the fee increases affected the stock.
posted on January 25, 2005 02:01:00 PM new
If you will rewind back to last week when the stock started to plunge, two of the things analysts were attributing it to were the overinflated value due to the weak dollar, which they thought was not sustainable, and Ebay's heavy investment in China which they don't see as being a viable player in the online auction business for at least 10 more years. There is a third thing that is making Wall Street a little uneasy about Ebay, and that is the abnormal amount of litigation they are involved in. Although the bulk of litigation may be small claims cases where someone had an auction Vero'd, or got NARU for shilling, a good many of the suits pending against Ebay are for substantial amounts with a good basis. Ebay has done an excellent job fending off frivilous suits in the past, but sooner or later, someone is going to get lucky on a class action or antitrust suit and hurt them in a big way.
A $75.00 solid state device will always blow first to protect a 25 cent fuse ~ Murphy's Law
posted on January 25, 2005 03:27:30 PM new
::The bottom line is that the stock dropped because Ebay did not grow as fast as had been expected in last year's fourth quarter.::
Not quite correct. If you look at the anticipated projection from Wall Street and the actual earning report, ebay earned MORE than the projection. The problem was that Wall Street underestimated the number of shares resulting in an overestimated price per share. Ebay itself on the otherhand understimated and actually exceeded it's own 32 cent projection.
Rob - I think you are quite correct. Ebay's stock increased 80% in value last year and there is not reason it could not do the sale this year.
~~~ • ~~~ • ~~~ • ~~~ • ~~~
If it's really "common" sense, why do so few people actually have it?
posted on January 25, 2005 03:44:19 PM new
Fenix...It just goes to show how a few negative comments by some select analysts at the right time can cause a snowflake to turn into an avalanche that can consume small investors as well as institutions. I agree, Ebay's performance for the past quarter was outstanding and probably envied by most of corporate America. I can't seem to get the phrase "market manipulation" out of the back of my mind.
A $75.00 solid state device will always blow first to protect a 25 cent fuse ~ Murphy's Law
posted on January 25, 2005 06:21:44 PM new
::The bottom line is that the stock dropped because Ebay did not grow as fast as had been expected in last year's fourth quarter.::
Not quite correct.
.
.Fenix....you conveniently left out the second part of that sentence....which was about the future projections by Ebay being below expectations. That's more important than the past as far as Wall Street is concerned. And you're nitpicking about this over and under estimation of the number of shares. Face it...revenue and profit(past and future) did not live up to expectations.
.
As I've stated before, Ebay stock may be fine for short term trading over the next few years....and I wish you luck if you buy it....but if you're under 55 I wouldn't put this one in your retirement fund. I doubt that Ebay will even exist 20 years from now.
posted on January 25, 2005 06:24:44 PM new
I have 160 shares, started with 30 so 130 are shares aquired from splits and I think there is another split sometime in February.
posted on January 25, 2005 07:08:55 PM new
Long - Don't you think there is a problem when ebay gives its expectation and exceeds them but stoks decline because the guys not involved in the business guessed wrong?
~~~ • ~~~ • ~~~ • ~~~ • ~~~
If it's really "common" sense, why do so few people actually have it?
The auction giant isn't exactly on the ropes, despite an earnings shortfall. However, if does need to start making some smart moves.
It's not often that a company's quarterly sales and profits both shoot up 44%, only to have its stock plummet by 19% the next day. But that's what happened to eBay (EBAY ) on Jan. 19 after it missed earnings expectations by a mere penny a share. Still, panicked as they may have been, investors had latched onto one irrefutable fact: eBay, long the most successful company on the Internet, is slowing down.
Truth be told, a close analysis reveals eBay is far from hitting the skids. After all, it's expected to post a hefty 30% gain in revenues this year, which would be the envy of nearly any other company. Indeed, some analysts slapped new buy ratings on the stock after the initial drop. And to her credit, eBay Chief Executive Margaret Whitman is already making big moves to restore eBay's luster.
eBay is now planning to plow $300 million, 50% more than planned three months ago, into promising new growth initiatives such as its Chinese site and PayPal payment processing service. Whitman says spending could pay off by boosting compound annual revenue growth by several percentage points in 2006 and beyond. "This is the right time to be faster, smarter, and invest more," she told analysts on an earnings call.
Even so, if eBay wants to rekindle its almighty upside surprise -- and keep setting the agenda for all of e-commerce -- it should consider several more moves as well:
Back off the fee hikes. Sure, giving up some revenue may sound counterintuitive. But eBay's merchants scream bloody murder every time fees go up. New hikes on Jan. 13 were no exception, as many vendors threatened to quit eBay and sell somewhere else. Few ever follow through, because no rivals have been able to offer such a vibrant marketplace, with millions of new buyers every quarter. "Will the people leave? I don't think so," says David Steel, CEO of online selling services provider Zoovy.
Even so, the alternatives look more and more attractive. They include Amazon's (AMZN ) fast-growing Marketplace, Overstock.com's (OSTK ) new auctions, and search site Google (GOOG ), which lets merchants narrowly target potential buyers searching for specific products.
Indeed, a few large eBay sellers have already departed. Mike Lazar, owner of TBC Video, used to sell 1,500 DVDs, videos, and CDs a day on eBay, or about $1 million in sales a year. Last year, his business became unprofitable because of the costs involved with taking care of e-mail, posting items for sale, and tracking down payments. So he moved most of it to Amazon, which takes care of payments and other minutiae. Even though he's selling only about half as much as before, he's now profitable because he needs far fewer people on staff.
Worse, eBay's fee increases don't bring in that much -- about $50 million this time, according to analysts, or just 1% of expected $4.3 billion in sales. Reducing some of them could end up attracting more sellers and, not least, keep existing sellers loyal.
Ditch those TV ads. Remember that eBay ad with a huge crowd of people showing off their vintage clocks? No? Or if you saw it, what did it say to you? Ask Debbie Levitt, president of the eBay merchant consulting service AsWas, and she complains: "It's painting eBay as a sea of obsessive-compulsive people."
With eBay now widely recognized, the money could be better spent elsewhere. Amazon, for one, has bagged TV ads and funneled the savings into reducing prices and offering free shipping. Those moves are credited with recharging Amazon's sales growth in the past two years and moving it into the black.
Diversify! There's so much stuff of all kinds on eBay.com that a lot of it can get lost in the shuffle. So eBay may need to provide different sites for different kinds of merchandise, merchants, and buyers. Already, it has conceded the point by creating separate sites such as eBay Motors for cars, canceling plans last year to fold its fixed-price outlet Half.com into eBay.com, and recently buying into several online classified-ad sites.
It could do more. Especially valuable might be a site that highlights the large, branded merchants such as Sears (S ) and Best Buy (BBY ) that sell on eBay. Scot Wingo, whose marketplace-services firm ChannelAdvisor counts them as clients, says those merchants could sell up to 10 times more than they do currently -- if they could advertise their wares more openly.
eBay rightly wants to maintain a level playing field for all sellers on its main site, so it won't give such merchants higher billing on eBay.com than any other seller. But a separate site for branded merchants might keep them from migrating elsewhere or sticking with traditional liquidators. To maintain its critical mass, eBay could link all its sites to share listings and let buyers and sellers use the eBay accounts, just as it does now with eBay Motors and Half.com.
Keep hammering fraud. While no hard evidence suggests that fraud is more rampant on eBay than anywhere else, it does happen. And more than anything else, fear of getting stiffed is what keeps buyers from trying eBay or turns them off after one bad experience. Sellers are angry at what they view as a rising number of deadbeat bidders, too. "Fraud is the single biggest issue," says Jay Senese, co-owner of jayandmarie, whose 6,000-plus CD sales a week make it one of eBay's biggest sellers.
The problem: eBay's process to catch crooks, whether buyers or sellers, is difficult and time-consuming. Sellers have to fill out nonpaying bidder forms, which can be unprofitably time-consuming for items sold for only a few dollars. And buyers often have to get local police involved. There's no silver bullet. But eBay's ability to keep growing depends on doing even more to ensure that buyers and sellers trust each other.
None of those moves will get eBay's stock back up to its peak anytime soon, since it was clearly overvalued. But they should help keep eBay at the forefront of e-commerce -- and maybe even cheer up worried investors.
__________________________________
"The more I want to get something done, the less I call it work." - Richard Bach
