eBay stocks on the Nasdaq exchange have reached an all time high price after news that it had struck a deal to “intermediate” payments on the marketplace under a deal with Adyen was revealed. The markets were also reacting to fourth quarter 2017 results which came in within expectations.
You can read more about the eBay and Adyen deal, and what it means for PayPal, in this news story from earlier today.
Astonishingly during the day, eBay stocks appreciated 15%, making it the biggest one-day gain since 1998 when it first went public and floated.
In particular, the markets like the potential for extra earnings that bringing payments inside eBay could potentially mean for the business. eBay has said that it forecasts the new move could net it as much as $500 million in operating profit per year. Some analysts have expressed surprise at such a high figure.
D.A. Davidson & Co’s analyst Tom Forte told Reuters: “Moving away from PayPal, lowering the costs of selling products on the marketplace, makes eBay a more significant competitor because it lowers the relative cost versus others including Amazon. But to be clear, there will always be a place for PayPal on eBay — it just will be less prominent.”
Regarding the fourth quarter results, eBay President and CEODevin Wenig said: “Q4 was a record quarter for eBay, representing the fifth quarter in a row of volume acceleration in our US Marketplace. We have made great progress transforming eBay while delivering meaningful growth and we expect further acceleration in 2018 as we continue to execute our strategy.”
Despite posting a $3.1 billion tax charge related to new US financial laws, which meant the company made a loss, earnings were in line with expectations and the global buyer base grew 5%. Tickets marketplace Stubhub and the various eBay classifieds businesses also did well.
You can read the full details of the results here.
Perhaps the Adyen deal is the sign necessary that eBay has turned the corner after some lack lustre results and seemingly few developments since splitting from PayPal. A strong and prospering eBay is a good thing, but only time will tell.