GM Kills $10 Million Facebook Ad Campaign Because It Didn't Work
JCPenney's Ron Johnson: 'Customers Don't Get Our Pricing Strategy'Do you believe in magic?
Meg Whitman, eBay's CEO, believes in the eBay magic. She wants to restore it. Well, she said it better. She said the SIF (Store Inventory Format) listings growth have "diluted the magic of eBay," and that, "We are trying to get back to the essence of eBay."
Magic shmagic! That was investors' reaction today as the stock resumed its selloff after such positive after hour gains yesterday. The stock declined a whopping 4.9% or $1.27 to close at $24.66. Why? I can only assume that growth concerns still exist, a flat Q3 guidance and the fact that the announced fees increases could upset eBay sellers further at the time they are already upset because of the Google Checkout ban.
- Credit Suisse: "With the stock trading at 25 times our 2007 earning-per-share estimate, we believe that valuation has gone well below reasonable and see considerable upside." Maintain "outperform", cutting price target to $45 from $60 because of China and Skype.
- Global Crown Capital: "It's about as in line as you can imagine [...] I certainly don't see a cause for raising estimates (earnings per share or revenue) for the full year."
- Stifel Nicolaus: the analyst believes the negative sentiment prior to Q2 was due to concerns about the shift to SIF, but raising fees could create higher commission and faster turnover. He thinks growth might actually accelerate later in the year.
- Goldman Sachs: Agrees with above: "The fee change could make this quarter mark the bottom in decline of revenue per listing." Left earnings estimate unchanged and $54 target price.
- Deutsche Bank: Lowered 2006 EPS estimate to 97 cents from 98 cents and 2007 EPS projection to $1.15 from $1.18. Price target was lowered to $26 from $30. "We feel that higher ad spending is clearly necessary for eBay to boost demand and to grow its top and bottom line."
- Piper Jaffray: "We believe that this is the right strategy but we are concerned that this may further upset sellers and decrease listings without a notable increase in conversions." Cut EPS estimates for 2006 and 2007 and lowered price target to $30 from $31.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 2 of 2)
7-31-2006 @ 10:41PM
Steve said...
Ebay frustrates me to death. I was one of the beginners on ebay. I used to be selling when they would give individualized customer service when needed. Back when they weren't sure if they would be a better auction house than amazon or yahoo auctions. I remember promoting paypal for them as well for 5$ a pop to get people to sign up. Now, I'm cursed. I can't get any help when I need it. They take a bigger and bigger cut of the profit as well.
I guess I'm stuck with them until something that gets a lot of viewers pops up, but I've definitely reduced my sales. Someday they will have a competitor that will produce what they have for cheaper...and I see a whole lot of people looking for a reason to jump off the ship. This is a dangerous place from which to be perched.
8-01-2006 @ 11:29PM
cyn said...
In a word "GREED". Ebay has to pay for the 25% they now own of Craigs List.
8-02-2006 @ 4:13PM
Sam said...
Hello,
Seeing this is a stock blog I would like to add for shareholders information what I see being omited here. ebay started a huge campaign to solicit sellers into opening stores. When the majority of sellers moved to sif, then feebay started listing stores in searches, and everyone I have spoken with noticed a jump in sales myself include, 1 month later they retract??? Who is the number cruncher makeing these decisions, Now huge fee hikes are the method that they use to drive away what they created?? Please be reasonable! Something stinks in feebaymart! I am no analyst but I do know when someone is being well, lets say less than honest. Buyer beware!! Cup of Enron anyone? Thank you for this oportunity, Sincerly,
Soon to be former power seller Sam
8-15-2006 @ 12:23PM
Kelly said...
I'm moving to overstock.com auctions. They have put a real hurting on ebay, their fees are much lower, they advertise, and I've had some success their just starting. They haven't implemented stores yet, but I look for that to come, especially now with so many leaving ebay. You can use google checkout as well.
8-16-2006 @ 10:27AM
Mark Shelton said...
We all have choices. Ebay gives you one - Take it or leave it- I think I'll leave it along with many others.
8-26-2006 @ 9:14PM
LLB said...
I have been selling on ebay since 1999 and this last fee increase for store owners was the last straw. They continually push the seller to the wall with yearly fee increases, terrible customer service, promises for increase store exposure that did not materialize and the list goes on. Ebay's so called continual efforts to "better the site" have just left me feeling totally disillusioned and betrayed. I am glad that I left, I can only see it getting worse.