‘@eBayeBayInc. recently posted its quarterly results for the third quarter of 2017. They weren’t particular strong and the share price has taken a fair battering since they were released.
You can read a digest of the results here directly from eBay that naturally emphasise the positive. But why has there been such a lukewarm response?
Firstly, there are some strong aspects in there. eBay Inc., of course, isn’t just about the eBay marketplace but rather quite a broad selection of companies. The tickets division, StubHub, characteristically did well and shows decent promise for future quarters.
There are various disappointments with eBay’s performances from Wall St. analysts and investors though. Firstly, they reported lower than expected earnings per share. And then eBay Inc. lowered the forecast for the fourth quarter. That’s not a good thing: for any retail firm the fourth quarter should be the strongest. Issuing a forecast that the Festive season may not be strong is bound to spook the money people.
eBay also relinquished eBay India in their deal with Flipkart. Whilst this arrangement is likely a sound strategic long term move it did mean that the number of registered buyers actually fell. Two million buyers joined but all the Indian buyers fell from the tally too representing a net loss of active registered buyers.
And there are also the unavoidable comparisons that looking at eBay attracts. Firstly it’s hard not to compare and contrast it with PayPal, which it split from over two years ago. PayPal is going great guns and has seen a notable 75% appreciation in its stock price since the start of 2017. It also looks set to have a rosy fourth quarter.
And, needless to say, it’s impossible not to also compare eBay with Amazon, which is on a simply astonishing trajectory, expanding into new fields and further developing its formidable fulfilment infrastructure. eBay looks decidedly dowdy and unimaginative by comparison.
Devin Wenig, President and CEO of eBay Inc. has been candid in his comments on the earnings call and since. He considers long term development and investment to be the best approach for eBay and he isn’t guided by quarterly boosts in the stock but longer term success and shareholder value.
ebay wont deliver meaningful growth until they understand how to enable small business growth
Find I only use it for auctions these days, my buy it now sales come through my website and physical outlets, ebay has become too slow, expensive and is flooded with competition from corporate and chinese sellers.
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