You can't ignore the fact that the stock recently was cut in half. There was a reason for this and that reason is still in place. After the holidays and the next quarter the figures will show a decline in Auctions,Stores and inventory. For a combination of reasons.... ebay charging more money for fees to do biz. here. The margins or profit are just not there in many catagories for many people here. You can blame the economy also, the general public is just not buying.... with the new fee structure in place last fall, the squeeze is on, i see it in my store and i monitor many of my competitors. You really have to pick and choose now what you are going to sell here. The antique market has always been the backbone here and that is changing. Many disgruntled sellers here. We all know what the service is like here.... Many people here flatout refused to do biz. with Paypal... That hurts everybody! buyer and seller. And last but not least, People are leaving and going elsewhere.... Google is comming and that will be felt here... they are doing a lot of things right and you can bet people will be jumping in droves. It was a good run Ebay.... That explains all the new areas of expansion, mangement knows it is not going to last forever... and as a store owner i see it comming firsthand!
We are both sellers here, you are aware of all the problems ebay has with their biz. model and policies. If you so choose to ignore it that is fine however, you are in the minority. The only difference between us, is that you own their stock and i don't. Technology will allow for competition, it is slowly creeping in, and with the current policies that ebay has in place, they will only move the process along at a faster rate. The uptrend from august my friend is short term, i belive we have to break some resistence to prove that, so far the trend is down!
First of all, ebay stock has been in an uptrend since August. Second, the sellers will go wherever the buyers are. The buyers are at ebay. As a seller I have tried other sites, but all of them are a waste of time. Few buyers, many non-paying bidders.
I have been hearing about the threat of other sites for 7 years. If Amazon and Yahoo couldn't compete with ebay, there is no hope for the littler guys.
The reason the stock was cut in half is because the future results do not look as good as they once did. Then add in a healthy dose of raising fees 40 percent by a company that goes out of it way not to have any physical contact with its paying clients. In the business world this is a first in a free market enviorment. You would only expect this kind of treatment from a monopoly like AT&T or a govt. owned company. But ebay being at the top of its game and having no competition for a number of years has enjoyed this position and it is starting to show in company policy. There are smart people watching how this company works inside and out and you can bet the companies in the infant stages that are looking to steal market share are not going to be setting themselves up in ebays shadow. These new companies will be keep it simple, you won't have to go to college to learn how to use their site. You will be able to find their phone number... and yes a real person at the other end of the line... how novel! The best thing for any company is to earn the respect of the people who make it possible for the employees to earn a paycheck. The Yield curve for ebay auctions is flattening out and that trend will stay in place for sometime as the competition slowly chips away. To think that this will all happen in a quarter or two is total foolishness. One only has to look at Craigslist... explosive growth, very different, simple and you can bet if ebay could buy more stock... they would do it in a heartbeat. And then their is Google.... its comming!!
"You can't ignore the fact that the stock recently was cut in half..."
Of course not. That is precisely what attracted me: a great company with tremendous cash flow, growth, and a wide moat, on sale for half off. What a bargain!
eBay has been on my investment radar since 2004, but at that time, the price seemed too high to me. When it finally broke below $40, I started a position. When it broke below $30, I greatly increased my position to 20% of my stock portfolio. My basis is $30.56. My fair value estimate is $45-50. Eventually the price and fair value will converge. I don't mind if that takes "some time." I'm here for the long run.
All who have tried to be an ebay alternative have failed completely. Google, as good as it is, does not have a 100% success rate (e.g., Froogle). Google is the only site with *any* potential for hurting ebay, but the odds are long and they are not really trying to do that. The juggernaut that is ebay will have some missteps, but the unrivaled power of the franchise will easily cover mistakes. Besides, if they have made a mistake with stores changes, they can easily take steps to correct the situation.