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eBay Inc. (EBAY) Message Board

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  • VoodooFinanceNotReal VoodooFinanceNotReal Aug 9, 1999 4:11 PM Flag

    DING! DING! DING!

    at $50 the risk is still too high. And it would
    take SPECTACULAR, fast growth to justify
    this.

    Nope, I would not buy this stock in unless I got
    realistic results with the price range. And the stock's
    volatility does not help at all.

    I still give it a
    wide range - $5 to $19. That's a very wide range of
    almost 400% from the low - fortunes are made and lost
    with those kinds of swings.

    I repeat - I WOULD
    NO BUY AT $50. The stock still makes no sense at
    $50.

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    • you make a solid point -- I have not yet decided
      if I will buy at $50 -- but that is the point when I
      will consider it -- and here's why:

      1) I see
      ebay as a high risk gamble -- if it can demonstrate
      some high growth, the idiots that drove the stock to
      $200+ will jump back in...

      2) it does have huge
      growth potential -- it has an excellent business model
      -- it reaps commissions by simply acting as a 3rd
      party in auctions -- if it can grow its volume with the
      internet growth, its future growth could be huge, which
      deserves a relatively high PE ratio -- granted at $50 this
      level may still be too high, but I believe a range of
      $25-$50 is more realistic for this stock vs. $5 -- high
      growth potential stocks have high PEs -- there is a risk
      that ebay does not prosper in the internet, which will
      ultimately prove $50 too high a valuation -- but for someone
      willing to roll the dice, I think $50 is the point when
      you need to start thinking about ebay

      3) as
      you pointed out earlier, I think we are on the same
      side -- I am saying ebay needs a $30 point drop to
      even think about investing in it, you simply are
      stating ebay won't come close to growing to validate that
      level -- hey, you could be right -- when ebay hits $50,
      I will research/evaluate further -- till then, I
      wouldn't dream of touching it

      thanks for your
      comments -- I am glad there are a few sane people posting
      on this board...

      • 1 Reply to noonecanbeasdumbas_abkcwls
      • I'm a frequent buyer on eBay and agree that it
        has a good business model that (when it doesn't
        crash!!!) creates a wonderful approximation of an
        "efficient market" of international scope. But until the
        stock drops dramatically trading in eBay stock seems to
        me to be little more than gambling in the purest
        sense (except for maybe the biggest institutional
        investors who operate in a completely different universe).

        Also, it seems to me that one of the biggest problems
        as the site "scales up" with more listings is that
        it becomes more and more difficult for potential
        buyers to simply peruse the listings much less bid on
        them. You get "buyer/bidder burn-out" and simply stop
        looking for a while because there is too much to handle.
        Also, buying in any kind of volume can be a big
        logistical/bookeeping headache that -- without question -- mitigates
        against frequent buying.
        An observation on "crashes"
        -- last night during the outage (it lasted for at
        least an hour and a half) I lost a chance to bid on an
        item and was pretty bummed; but today I got an item at
        a price that was MUCH lower than it should have
        gone for given recent auction results and I think this
        was related to the fact that it was a three-day
        auction and a lot of potential buyers hadn't had a chance
        to find the auction. A key point is that if you
        REALLY want an item you will place a large proxy bid
        well before the auction conclusion to make sure that
        you don't get shut-out by an outage -- this will tend
        to increase the final sale price of an auction
        because it sets a level that other bidders KNOW they
        haven't yet reached with lower bids. But if no one REALLY
        wants an item or you are willing to risk an outage by
        waiting to place a last minute bid then "crashes" act to
        reduce sale prices. Which scenario has more affect on
        auctions overall? I dunno. I imagine that eBay management
        would argue that it's a six of one/half a dozen of an
        other wash, but I'm not so sure.
        submitted for your
        consideration

 
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