eBay meets Q2 Earnings Estimates, raises Store fees, buys back stock

[rejoicemusic]

Pre-marketing trading had eBay at 24.66 this morning.  But some stock analysts seem to think eBay is just swell - Pat Dorsey from Morningstar said:

Speaking of tech stocks that have gone from hero to zero in a heartbeat, there's eBay (NASDAQ:EBAY - News). We've been collectively scratching our heads over this one for the past few weeks as the price has collapsed, and the only reason I can think of as to why it's gotten this cheap is an utterly irrational fear of Google (NASDAQ:GOOG - News). I say irrational because eBay's core auction business is still doing just fine, the international sites are growing nicely, and that lovely pool of liquidity that forms the core of eBay's economic moat just gets bigger and bigger. We think eBay is worth much more than the current stock price. This is too good a business, growing too quickly, to stay at 20 times forward earnings for very long.

Of course, many stock analysts said probably the same thing about Enron until the day it blew up.  I though some of the int'l sites were tanking as well - did someone post about Germany?  And Australia and the UK just had HUGE store fee increases. 

[amy]

only down 20 cents so far today

[stardust]

...Originally from the ebay Stock board... copied from the ebay Stores board...

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Re: Fee Hike Knocks out 1,000's of sellers
Absolutely correct.

I've been an ebay powerseller for 6 years.

1 - Ebay cannot convert any significant portion of the 83% sitting in stores into auctions. Half of these listing will disappear - period. They are already in stors because they have a slower sales cycle.

2 - Ebay is admitting a failed strategy. Ebay has been preaching to it's powersellers FOR YEARS that we should use auctions to drive buyers to our stores. Ebay also started it's Ebay Express program to sell more fixed price STORE items. Now they want to kill the very business they cultivated. This change is a fundamental shift in their business strategy and should not be taken lightly.

3 - If they wanted to increase auctions, they should provide auction incentives - not store disincentives. The only result of this action will be to decrease items for sale, and decrease the number of serious ebay sellers.

4 - This move will certainly increase the number of sellers practicing "fee avoidance" by stacking all of their profits into shipping and handling. Ebay has been unable to curb this practice. This is a major area where Ebay is losing fees.

5 - Ebay's web exposure is HALF of what it was a year ago, and their site rankings have fallen to 13 from 5. This continues to errode.

6 - All Ebay sellers know that sell-thru rates and prices have fallen drastically over the past 3 years. So sellers are getting a lot less bang for the buck - Ebay's response is to squeeze it's sellers for more $$ to make up for their poor performance.

7 - ALL big Ebay sellers either have or are planning on their own websites. The $2000/month I had been paying in fees to Ebay are now going to Google Adwords for my own website. This has proven to be FAR more cost effective. If Google payments take off, there's another $1000/month Ebay will also lose.

I'm just a speck in Ebay's eye - and my response to Ebay's poor business strategies has cost them at least $50,000 in fees over the last 3 years. That's $50,000 I would have been fine spending with Ebay had they showed even the slightest interest in helping my business.

Fees are like taxes. There is a certain point where too many stifle business, and revenues actually suffer. Ebay is actually choking off it's own business.

I don't think many on this board realize how much the Ebay buying experience has changed in 5 years. Entire categories are now flooded with .99 cent items with $100 shipping fees, as well as a literal flood of Asian bootlegs of almost everything. This is not only killing off legit sellers (3 of the biggest 5 ebay sellers OF ALL TIME are now gone), but killing off good buyers as well.

Online commerce is NOT slowing down - yet Ebay IS.

Google's success is directly proportional to Ebay's failure. There is nothing in Ebay's plan that will stop their downward progression as an online marketplace. Competition will continue to increase - and buyers are trying out new sites every day.

Ebay exists because buyers can (1) find the hard-to-find, and (2) get a good price. Hard to find items are often in stores. A good price requires a cost effective sales channel and lots of competition. Ebay's recent moves will decrease store items and decrease price competition.

This is why large funds are dumping at least a portion of their Ebay holdings, and many are probably moving into some of Ebay's competition. The best they can hope for is that Ebay can slow or hold off it's steady decline.

Paypal is all that's holding Ebay's growth together, and that is under pressure as well.

[regic]

Of course, many stock analysts said probably the same thing about Enron until the day it blew up.

Stock analysts tend to be fools. The dotcom bubble is a perfect example.  Goldman Sachs maintained a buy rating on eToys as it slid from 79 to 2 when they moved it to neutral.

Skype's questionable future prospects have also been contributing to the stock's decline:

Skype: lots of spin from eBay but few facts
http://community.tuliptools.com/index.ph...247.0.html

[xppman]

Enron   :blinkie:

Say it isn't so.
Hey what's that smell coming from the kitchen.
Momma Meg been "cooking" up something AGAIN? 

[BellisimaJ.]

This is from the Ross show. Just had to share as it is so on target and very funny.
Bobby's thread title is: Bill Cobb Can Suck My *ick 

Somebody needs to explain to Meg that after you have taken the cute little farm girl to town; whored her out for 5 years; sit back counting your cut of her tricks while everyone tried to tell you she was gonna catch the clap; and then drag her down to the abortion clinic a half dozen times......that you aint gonna slap lipstick on her wrinkled face and make her a virgin again. 

It is ludicrous for her to blame the stores program for "diluting the magic" when she turned the fire hose on the mixture after her first year at the helm. Every move they made for the past 4-5 years was *IN* the direction of where eBay is today......and they are just NOW noticing the "essence" has changed???

(after "essence" he had  a flaming turd gif..)

http://www.therossshow.com/showthread.php?t=5381

[BellisimaJ.]

Darn, just figured out that you all knew about this post on the Ross show. 

Oh well, should have known.