Honestly, I don't get it. Let's assume, as the DLJ analyst this morning said in the eBay press releases, that the market for person to person merchandise is 180 billion worldwide.
Assume that in five years 33% of this commerce is done by the web, through auction services. (Boy, that seems OPTIMISTIC.) That's 60 billion worth of transactions.
Assume that eBay captures 60% of this business, which would be 36 billion of transactions.
Assume that eBay generates 5% commissions from each of these transactions, which would represent gross sales to eBay of 1.8 billion dollars.
Assume that each sale is for about $50, which means maybe 720 million transactions. Figure three times that amount represents total transactions, including those that didn't close any sale. That's about another 1/2 billion in revenue.
So eBay's best-case gross revenue five years out would be 2.3 billion dollars. Their current market capitalization is already near that. So what is my upside on this stock? I have to pray that they blow the doors off the world market for five years, and in that very unusual case where they succeed in doing that (maybe a 10% chance of happening), I maybe double or triple my money?
What am I missing? I don't see ANY case for a huge upside on this stock that makes me 10x my money in any reasonable period of time.