NYSE Owner $30 billion bid for eBay considered

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The owner of the New York Stock exchange (NYSE) approached eBay with a take over offer which could have been north of $30 billion. The Wall Street Journal says that the two aren’t in formal talks and $30 billion bid for eBay negotiations have been dropped.

Now one approach has been made to eBay, the only question that remains is how many more there will be and if they will all be hostile without the blessing of the board or if someone will stump up the cash to effectively take eBay private.

The NYSE is effectively a marketplace for shares, so it’s not totally different to eBay’s business model, however there’s a huge difference between trading shares for a few thousand companies and trading over a billion discrete products from 6.7 million sellers to 168 million buyers on eBay around the world.

The interesting aspect to consider is what would an eBay acquisition bring to the marketplace? If eBay were no longer beholden to share holders the pressure to turn in more than half a billion or so dollars in profits on a quarterly basis would disappear. Would the pressure of having to turn in profits effectively allow eBay to press a reset button, totally revamp the marketplace, kiss goodbye to their current direction which is to squeeze ever more margin out of flat or decreasing sales, overhaul the technology and relaunch with a new direction?

Waving off profitability for a year would only be possible under private ownership – it would be a hard sell to investors to lay out a growth plan which ditches profits for a year when eBay’s recent history has been flat or very low growth. Amazon get away with it because they’ve shown distain for profits in favour of growth but eBay haven’t had stellar growth in recent years and so profits are all they have to offer investors.

There’s little doubt that now once possible acquisition has been made public that there will be more down the road and it would be no surprise to see the eBay marketplace sold in the near future. All that remains to discuss is if $30 billion bid for eBay didn’t tempt the board and investors what is the magic number that would? Is it $40 billion? $50 billion? Is it a waiting game and if eBay fortunes don’t improve then $30 billion might be more attractive. Will the numbers stack up if the StubHub sale is completed and Classifieds are also divested?

If eBay was taken private and you were in charge, what is the first thing you would do? Is it slashing fees or are fees not the underlying issue as you’ll happily pay them if the sales are flooding in? Is it the tech base and it’s time to totally revamp eBay’s 25 year old code base? Is it a direction swerve away from the new in-season stock to eBay’s roots of the quirky collectable that will get the buyers flooding back – which in itself is contentious as many sellers have built their businesses selling new products?

Where would you start? All ideas gratefully welcomed so long as they are constructive and will save eBay. Who knows, perhaps the current board and a new CEO could do the job without the eBay marketplace being sold off and effectively taken off the stock market and privatised.

18 Responses

  1. This is exactly what ebay doesn’t need. It needs a good, solid ten years of the same leadership with a focus on what it’s doing. If you look back at the big failed retailers, Woolworths, House of Fraser etc this is exactly what happened to them, 2-3 years of leadership, bits sold off, the whole company sold off, then it falls apart.

    All this whilst Amazon thunders on.

    Going private they will strip out every last penny they can and sell it off again in a few years.

  2. 30 Billion is that all it is worth now, I thought it was a 50 billion company…

    I said this was on the cards. The current leadership have virtually driven the site into the ground over a period of 3 years, the steep decline started just after 2016 and has continued.
    The site is generic and boring, penny chasing pay to play and they constantly want more for less, that can only last so long.
    eBay is like the p4U model (own nothing) who without the networks went bust overnight, and it is driving merchants (the networks) to alternatives with their high fees leading to high prices , shocking service, and boring platform which in turn drives customers to alternatives.

    The site is also badly policed with fake and miss sold products rift.
    Quality and service means nothing in the era of Pay to Play.

    I would get the USP back. A place where people can come looking for a genuine alternative ( but let merchants BUILD their own unique offering without choking them with fees, hiding listings and metrics and corporate waffle, and scrap Pay to Play on day one ) like it used to be. Let merchants breath and they will do the rest.

    That will bring back buyers and build from there, stop thinking short term and look at the site over a 5 year period.
    End of the day if they do not change they will not even be about in 5 years.

  3. It was only one week ago you asked us
    “what would you do if you were ebay CEO?”
    and i answered with
    “find some chump to buy this sinking ship”.
    Maybe eBay execs do read tamebay after all….

    Possibly being taken into private ownership is the answer ebay need, however i can’t help but get the feeling that the owner of the NYSE would want to float it on the stock exchange at some point.

    Also it’s plain to most of us that ebay has been cash-grabbing for years, the numbers are to keep the investors happy and we know they’re hollow. if the investors also know this, why are they willing to pay an inflated share price before the bubble inevitably pops? the cynic in me says they lapped up devin wenig’s approach and have some new ideas for how to wring even more cash out of us.
    the optimist in me hopes they saw the cash-grabbing, know the inevitable outcome, but also see the long-term benefits of restructuring ebay for long-term growth rather than leeching sellers for short-term investor happiness.

  4. Has anyone heard from Alan Paterson who used to post on here?

    He had some very radical views on how to improve the marketplace and seemed to be uniquely in-tune with what was required. He regularly traveled round the UK helping ebayers like me – at no cost and apparently no financial reward. Accused frequently of being a secret employee of the company he received no financial gain and traveled using his own money – seemingly for the love of the ebay platform.

    Have sellers like this even quit? I know he had some health problems and had issues with buyers abusing returns last year. Has anyone heard from him?

    ebay seems to be going to pot and my guess is only sellers with a genuine love for the platform can make a difference. I heard he got repremanded by Concierge for helping fellow ebayers with their businesses! Have ebay gone mad?!

    Paterson seemed to have a unique take on what was wrong on ebay and what was causing its demise.

    Where have you gone Alan?

  5. I was taking the piss
    this cult of the paterson is ridiculous
    hes a shoe seller with some experience ,not the flaming messiah

  6. Alan P had his own thoughts, often different to those of mine. However I can tell you his heart was in the right place. He had health issues and sadly I think a really bad buyer left him multiple DSR dings and ebay would not remove them. Sadly what happened to Alan could happen to anybody- ebay and it’s ludicrous metric systems could finish anyone’s business at the click of a button.
    Alan if you read this please let us know your ok, even if you don’t continue to post on Tamebay as before.

  7. This was just another short-term eBay stock pump and dump scam with multiple players involved. eBay insiders, activist investors, Wall Street traders, going with the fake buyout rumor so everyone can cash out at a higher price. This kind of thing happens at least a couple times a year it seems. Several “news” and “rumors” and “propaganda” type things always converging together. Stock was dumped hugely after hours and now downward again the stock will go. Likely going back where it was after their garbage earnings report. There is no buyout, the companies were never in talks, and eBay wasn’t selling anyway. Stock manipulation scam all around, likely excluding the “buyout” company ICE whose stock took a pounding while eBay’s went up. I guess they weren’t invited to the party.

  8. So yes, what I’m saying is eBay are crooks. And we all know activist investors/hedge funds and Wall Street are as well. Everyone has to cheat like this for eBay stock to move because they can’t do it on their business results.

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