J U D ' S L A T E S T
Monday, July 26, 1999 - 11:13 PM ET
recommended shorting eBay as a Weekly Stock Pick, I am going
to follow up with analysis of the company�s earnings
report released after the close. EBay reported second
quarter income, excluding one-time merger costs, of $5.1
million or four cents per share, edging out First Call�s
prediction by a penny. Including all unusual costs, the
company had net income of $816,000 or one cent per share.
Surprisingly, in the year-ago second quarter, eBay's net income
was seven cents per share.
EBay said its
revenues totaled $49.5 million, up from $19.5 million a
year ago. More importantly, the company logged very
strong traffic and usage numbers. EBay hosted 29.4
million auctions during the second quarter, up from 22.9
million in the first quarter, while its total number of
registered users grew almost 50 percent from the end of
March, to total 5.6 million by the end of June.
So in general, the quarterly numbers were fairly
good. The fact that the company�s profit actually
decreased from last year is not really a big concern
because eBay spent significant money on acquisitions,
marketing, and fixing the recent problems with the site. The
fundamental problem for eBay is that the stock is in an awful
downtrend at a time when Internet stocks have once again
resumed their downward slide. On Monday, Yahoo dropped
$11, Amazon fell 7%, and AOL slid almost $8 per share.
Coupled with the fact that the quarterly numbers were not
phenomenal, and investors will likely find the $13 billion
market capitalization not very appealing.
after hours trading, the stock first rose as high as
$110. However, by the end of the session, eBay was
trading under $100. If Instinet activity is any
indication of the market�s reaction to the earnings numbers,
I expect a weak opening bid in the morning.
I have to agree with you the price will be alot
lower, maybe you don't understand the market as much as
I do! If I see this stock reach 120.00 before it
hits 80.00 I will not post here again, If we see 80.00
(sooner then you think) I would suggest you put your
money in cd's!!!