eBay after the bell 10-4-06: Up 6.10%

One answer is, EBay’s management spoke like a structured growth company should.

Ebay may be looking to make an acquisition of Stubhub, an online ticket marketplace http://mrwavetheory.blogspot.com/2006/10/stubhub-on-block-ebay-buyer.html

"For the times they are a changing."

"Is it truly on investors' belief of changed fundamentals, or is it something else?"

Could it be history repeating itself?

Part 1:

On September 26th 2006, Ebay's shares rose by 5.5%, which was mainly attributed to a call by Goldman Sachs analyst Anthony Noto:

http://today.reuters.com/news/articleinvesting.aspx?type=hotStocksNews&storyID=2006-09-26T223433Z_01_N26383340_RTRUKOC_0_US-EBAY.xml

Lets have a closer look at Goldman's history and more significantly, their relationship with Ebay's bigwigs:

http://www.auctionbytes.com/cab/abn/y02/m12/i20/s01

Fishy eh? What's more interesting is Noto's call in January 06 (When shares were around the $50 mark). In January 2006 he claimed "the online auction company is at its best position in a year."

http://www.forbes.com/markets/2006/01/19/ebay-earnings-0119markets17.html

Whoops! 6 months later that stock price virtually halved.

Part 2:

On October 4th 2006, Ebay's shares rose by 6.1%, which was mainly attributed to a call by Morgan Stanley analyst Mary Meeker:

http://www.marketwatch.com/news/story/story.aspx?guid=%7B652B1DEA-5265-4A04-B286-3FAF8FCE3F77%7D

Lets have a closer look at Meeker's history and more significantly, her relationship with Ebay's bigwigs:

http://www.thestandard.com/article/0,1902,28410,00.html

Fishy eh? What's more interesting is Meeker's call in March 06 (When shares were around the $40 mark). In March, she claimed "the online auctioneer's stock remains strong and is still in early innings of a secular growth cycle that it is leading."

http://www.forbes.com/markets/2006/03/31/ebay-0331markets05.html

Whoops! 4 months later that stock price fell by around a third.

Hi Alex,

Are you suggesting clever investors are persuaded to risk money by analysts using poor research or, even worse, manipulated figures as justification?

Well I never! Fishy you say?

I guess big fish will always eat little fish and, to do that, they will continue using tempting bait or ambushes.

Alex
Thank you for putting it in print withback up links! Many have been saying for months that there was something fishy going on.

Pay no attention to those ugly rumors on the trading floor about eBay administration being,

"Lopped off at the neck October 20th."

I'm sure those are based on unfounded conjecture.

But of course, I could be wrong!

Almost all of the analysts and many of the Marketwatcher eJournalists, simply regurgitate the tripe that ebay spits forth. The true numbers are right on the ebay site, for all to calculate, see and ponder.

Go to the Home page & click on the Buy tab. Go to the bottom, right-hand side of the categories shown and click on the "see all categories" link. From that page, you add up all the main categories' listings.

You can also choose between what items are shown: 'Available on .COM', 'Listing on .COM' and 'Located in USA'. The Available items are the ones that ebay allows in from the International sites - no matter what they charged those sellers on their own site. Sometimes, the exchange rate causes the listing fee to be about 1-2 cents; not equitable to the US seller that pays upwards of 70-cents to a couple of dollars.

The total amount of items listed in auctions is currently 11.4-million; listed as located in the USA. For items that are 'along for the free ride', that total is 14-million. This is the EXACT same amount it was in the 1st Quarter of this year. No change - not down and defintely, NOT up. Last year at this time, it was 15.5-million. I can't see how so many people claim that listings are up. That is simply wrong...on so many levels (pardon the cliche).

For items listed in ebay Stores, the current total is 37.4-million; located w/in the USA. The total, including the international sites Free-Riders, is 42.9-million. That amount is actually UP from the 1st Quarter amount of 41-million by a couple million. Again, I can't see where other people claim that Store item listings are declining. Wrong.

And all ebay has to do to get the .COM site's numbers to go REALLY high (causing the analysts to have dollar signs in their eyes!) is to instantly allow another International site's items to appear. Heck, if they allowed ebay.cn or ebay.in through the door, the auction counts would skyrocket to 22-million or more.

Trouble 'tis, NONE of those sellers pay any listing fees, so all those *wonderful* numbers are simply a facade. Like when ebay allowed the Indian site's items to appear on the US site a couple weeks ago. Most of those items/sellers wouldn't even ship to the USA...that was just SO stupid. And Wrong!

Lies
Damned Lies
Statistics

Well, as one of those store owners hit hard by those quickly-announced fee hikes (and right before the biggest selling season of the YEAR, of course), there is nothing "rosy" about what eBay is doing.

I would eye ANY analyst's review with suspicion these days. There are only a few who know the real goal of eBay these days, and NONE of us are privvy to it. We only see a little part of the big plan.

However, what they HAVE succeeded mightily in, is alienating a large portion of their customer base so badly, they will never return to sell OR buy. They have priced many of the small sellers, who relied on eBay stores to supplement social security, or perhaps were disabled and could still make a living by selling there, right out of the water. In our own case, we sell low-cost brand new items (not the "junk" alluded to by Meg Whitman in one investor call). We had $28.00 in sales last week (extremely low for us). Worse? The eBay bill to SELL that $28.00 worth of widgets was $31.00, not even counting the Paypal fees. Their attempt at having sellers tithe 10% of everything they make is not going to fly. That is simply too big a piece of the pie for them doing none of the work. Additionally, the stores are not free. If they were, then eBay could maniplate in whatever way it wished to. But, we PAY to house our listings, and it is up to us to drive traffic to them, usually via auction listings. Now though, store listings are buried under any number of other types of listings - stores are at the bottom of the heap. Express has been a failure, and store owners are thinking the fee increase was to cover their expenses on that fiasco. eBay told store owners we used too much bandwidth - riiiight. That is why you rolled out the MatchUps website, which is a bandwidth hog... It just doesn't add up for any store owner with any business sense to stay at eBay any more. Unless you grossly overcharge your customers, you'll lose money to be there. Those with a conscience are moving to other venues, or opening their own stores. eBay gave them the kick out of the nest. We all hope they enjoy those "core" listings (their new term for auction-style listings). Most of your formerly-loyal sellers (who were also buyers) will not be there to help you celebrate.

Post #9 makes a great point about how easy it is for eBay to manipulate the numbers.

I don't really think there is anything we can trust from this company, who apparently learned nothing from all the falls of other large corporations in recent years.