Could a potential eBay marketplace sale be close?

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There are reports out that unsurprisingly eBay are negotiating with the activist investors who want to see more value from their shareholdings. Rumours include everything including a potential eBay marketplace sale.

Activist Investors

In January, Elliott Associates who own around 4% of eBay’s outstanding shares, worth about $1.4 billion in market value, set out a five point plan for eBay which included selling off StubHub and eBay’s portfolio of Classifieds properties. Then, after eBay’s Earnings Call, Elliott reiterated their directive that eBay needs a strategic review that evaluates a separation of Stubhub and Classifieds, which is even more necessary given an increasingly disappointing Marketplace outlook.

Elliott Associates have been joined by Starboard Value and both the Wall Street Journal and Bloomberg report that talks are close to a deal with eBay to pacify them. Both Elliott and Starboard could seek seats on the eBay Inc board although the two sets of Investors aren’t working together, potentially making it even harder for eBay CEO Devin Wenig as he has two similar deals to cut.

Potential eBay marketplace sale

CNBC goes even further than suggesting that StubHub and eBay Classifieds could be divested and raises the question of a potential eBay marketplace sale, which could be priced in the region of $15 billion. Potential suitors for eBay could include Google, Walmart or private equity firms if rumours are to be believed.

Whatever the outcome, it’s a diversion that eBay really doesn’t need at the moment – they need to get to grips with their multi-year turnaround and Devin Wenig has had almost four years since the PayPal split. Yes, eBay Payments is looking like a promising earner and eBay Advertising could also become a $1 billion business unit in a year or so, but in the mean time eBay’s Product Based Shopping Experience hasn’t quite worked yet with this week’s seller release backtracking on matching products to the eBay Catalogue and laying out a programme to make more Item Specifics mandatory instead. Additionally eBay are converting all fixed price listings to the Good ’til Cancelled format suggesting that it will attract more traffic from external search engines such as Google.

eBay need to put a plan together to keep their activist investors happy or we could see a break up of eBay Inc that would make the PayPal split seem almost insignificant. eBay listings may be soon Good ’til Cancelled, but eBay management themselves could suddenly find that their governance of eBay is also Good ’til Cancelled.

One thing is for certain, Investors may be interested in returns, but for the hundreds of thousands of sellers on eBay what’s important, is stability and certainty. That’s even more so for sellers in the UK who are facing an uncertain future still with no clear idea of what Brexit will bring. Strong and stable leadership hasn’t worked so well in UK politics lately but it’s what the country needs and it’s also what eBay needs.

11 Responses

  1. This was always the likely outcome, once it became clear Wenig didn’t know what
    he was doing, or even what direction to go in.

    Like wandering around in the desert, they just keep going round in a circle, as the latest seller release shows.

    And the vultures are now gathering.

    If you sell on Ebay and haven’t built a life raft – you’d better start building one now.

  2. No. You took someone’s personal speculation and have built it up to be something more than what it is.

  3. What sellers really need is representation on the Ebay board.

    Just as many football clubs have a supporters group represented, Ebay should have representation from those who pay for everything, namely sellers.

    Football supporters are passionate about their club, but sellers have their livelihoods on the line potentially when Ebay makes changes.

  4. I think it’s much less likely that the marketplace will be sold off first (but hey, who knows what’s happening behind closed doors).

    More likely StubHub and/or the classifieds groups to be spun-off so that Elliott can get to work on implementing their “Enhancing eBay” plan to raise the value of the marketplace for an eventual sale in a couple years (pretty much as they outlined in their letter).

  5. The problem with ebay is it bases most of its direction and settings upon a few market places like the USA. What they fail to grasp is that what works in the USA may well not work in the UK… But hell, that is rocket science so lets just pretend it does. Then they made a nother mistake which is thinking that sellers are all fools. Sadly we are not… hence the seller exodos. Yet ebay just look at the amount of listinsg and say hey this is great… but in reality it is 1000 chinese tat listings for 1 normal listing. In the words of one of my customers recently, ‘ i had to scroll through 7 pages of duplicate listings from China to get to yours, I did try UK only, but still had pages of sellers who have all suddenly set up in Manchester with 10 day shipping…’ This is the issue ebay.
    If you want to make more money… deal with the tax avoiders, deal with the scam culture, deal with the fakers and the zero service sellers. then you will keep your decent seller and attract more buyers. Oh and maybe act on things that get reported? justa wild suggestion.
    What will actually happen is fees will go up again and the 10% discount will drop to zero and instead we will be offered something we don’t want and don’t need.

  6. They just see fee hikes as the way to make more.
    what they don’t realise if they leave the FVF fees alone they get more money naturally from inflation. So a products increased price gives them increased money and sellers may be able to sell more so increasing their cut even more. Instead the fools say offer multibuy discounts which actually takes away their profit.
    Imagine you use 1 tub of face cream per month at £10. eBay get a lovely £1 so they say lets put up fees they get £1.10 but along with a price hike of trade prices the item is now even more expensive and customers shop elsewhere or reduce use of the product.
    Ebay say offer a multi buy discount so 2 with 10% off means £18.
    eBay now only get £1.80

    The customer does not buy for 2 months now as they cant add it to their face twice so eBay have lost 10p per month.

    not rocket science

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