I started writing about eBay for Blogging Stocks in mid-June, only a month and half ago, when eBay was still over $30 a share. It's now trading under $24.
I kept noticing this downtrend, aware of investors concerns, but never 100% sure why the sentiment was so negative. Especially after Q2 earnings report. I thought that at most, and especially after the store listing fee increase, it should be treated as a neutral investment. A wait-and-see attitude, if you will. After all, isn't that fee increase a good move, promising the return to auction format, and hence more volume growth? (That would be despite the wrath of sellers apparent in the comments to this post).
In any event, last week I couldn't keep up with the news as we left Northern Israel to spend a quiet week south of the war zone and my Internet access was rather limited. However, from all I managed to gather today, sentiment continues to be negative despite analysts noting improving fundamentals.
For example, last week, Caris and Company analyst Tim Boyd told investors he thinks Q2 was a trough and sees strong listing growth of 40% year-over-year.
Bear Stearns, as Amey Stone reported last week, also believes most of the risks are already reflected in the stock price and has an outperform rating on eBay with a $33 price target, but recommending it for the long-term patient investors.
On a positive note, I read on the UK Times Online today that Britons spend "more than ever before online, particularly on auction websites such as eBay."
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Reader Comments (Page 2 of 2)
8-02-2006 @ 4:42PM
Shauna Barhite said...
Someone said it in an earlier post, and I've remarked myself recently that ebay is the Enron of the internet. I wouldn't be surprised if they found themselves on the losing end of several class action lawsuits in the future. The seemingly endless problems they refuse to address, the COMPLETE lack of customer service and the intentional hiding of store listings from potential buyers are just a few of the issues at hand.
There simply is no way for anyone to get help with anything when it comes to ebay. They rely on their paying customers to help each other out and police their site for violations instead of hiring competent employees to answer customer service questions.
They intentionally hide store listings - and I don't just mean the "hiding" they tell us about up front where store listings won't show up in a search unless there are less than 30 auction listings for the same thing. I mean covertly, randomly and intermittently making store listings completely disappear for hours or even days at a time. Many sellers aren't even aware of this if they aren't checking their listings all the time! If ebay thinks sellers are disgruntled now, wait until more of them find out about their disappearing listings!
On top of that we now have yet ANOTHER raise in fees that makes it virtually impossible to be profitable on ebay anymore. It was difficult enough before, with 40% to 50% of the gross going to ebay and PayPal, but this latest round of hikes is insane. If it wasn't so devastating to so many people it might be funny that ebay claims the rate hike is only 6%. Mathematically challenged in addition to being completely inept business people. The fee hike actually amounts to a 150% to 500% increase in fees for store owners.
It's time to get out of ebay - both from a stockholders point of view and as a customer. The advice to be patient will only serve to encourage people to lose even more money on a company run by greedy executives looking to pad their own pockets while sucking the life (or what's left of it) out of their site.
Ebay is in its death throes. Buyers go where the sellers are and the sellers are leaving after taking as much brow beating as they could possibly manage.
If top level mis-management is not replaced in the near future with people who actually know what they're doing and which direction to take the company, there will be nothing left on ebay but stolen merchandise rings, identity thieves and fraud.
There have been too many blunders in the last 14 months and swift changes of direction that lead to more confusion for everyone trying to keep up. Everyone's heads are spinning and the only people that seem to be doing well with all of it are Meg and Bill - because they're making an obscene amount of money by ripping off buyers, sellers and stockholders alike.
8-05-2006 @ 2:25PM
Betsy said...
I can understand ebay wanting to get rid of their costs of housing all of our unsold store inventory, and pushing us, by higher fees, to only list things on ebay that we are sure will sell. Gives ebay the most bang for the buck and returns us to the magic of old ebay. There's just one sticky little point. If China is allowed to dump gazillions of cheap items on ebay for free, er, what exactly was the plan?
However, folks, it is going to be darned difficult to move to another auction site as long as all we know is how many listing each site has. That tells me nothing. I need to know who has the buyers. Where are things selling? Nobody that I know has those comparative stats. So we'll all dilute our power by spreading things out all over the place, get little response, and limp back to ebay, wistfully thinking about how if we had all jumped ship to the same other auction site, ebay would be gone.
This time won't be any different than last time. Except we will be even more hardened in our hearts to a company we used to love and feel like we had partnered with for the long haul.
8-08-2006 @ 1:52PM
Veri Tas said...
It's about competence STUPID
I'd define Ebay's Internal Management problem as follows:
1. Low IQ (intelligence)
2. Low EQ (experience).
Combined, we have an organization unable to seriously THINK and anticipate consequences. There appears to be an inability, or worse an unwillingness to "peek around the next corner" to anticipate responses. Instead there seems to be a built in bias towards something similar to an adolescent child impulsively grasping at the "next attraction" even if hollow in content.
For every action there will be many reactions and ebay's inabiltiy to comprehend these in advance has a huge, growing and increasingly hostile response building up among its sellers.
I am one of the fortunate ones in that I built a successful e-commerce site of my own (after first observing the above 5 years ago) so I can afford to be circumspect about ebay's short sighted (unsighted) failings.
They can't really hurt me as I consider ebay as a "feeder" site to my own website. Clearly, if I only operated at the ebay level with their toddler training wheels down, I'd be DOA long ago.
Cheers!
Veri
8-31-2006 @ 1:33PM
teresa said...
try wagglepop.com, just like ebay less fees
9-16-2006 @ 3:20PM
Stacey said...
Ebay has fraudsters running rampant in most categories, but doll and bear sellers have been hit really hard, and without action being taken by Ebay.
I moved my listings to www.bows-end.com where they at least listen and respond.