Although Jim Cramer loves eBay Inc. (NASDAQ:EBAY) and thinks all the bad press and bad feelings are already priced into the stock, the company has had a disastrous 2006 in regards to its stock performance. The numbers don't lie -- and there are some who are picking up positions in the world's largest online auction website for *if* the company's fortunes turn around. Never say "when", though -- only "if."Hey - eBay has no debt and continues to do solid business, although there are laundry lists of things that the auction giant fails at -- like customer communication, bad customer service, increasing fees and about a million other things. Still, from a purely financial standpoint, the company is in great shape. Any company with eBay's scale that has little to no debt should be considered pretty darn decent. But, how decent?
Since the total returns on eBay has been all-over-the-map, it scares those not used to volatile stock price swings. Such swings occur sometimes over the course of a few years. EBay stock had incredible gains from 103%, 91% and 80% in 2001, 2003 and 2004 respectively to declines of 63%, 47% and 23% in 2005, 2000 and 2006. Now, that's volatile. Where do you stand on eBay shares (not the company itself)?
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Reader Comments (Page 1 of 1)
12-08-2006 @ 1:57PM
Gary E. Sattler said...
I see eBay shares as being about 1/3 their actual value right now. The problems are vast. The direction is ill defined. The share value is lagging based on a lack of vision for the future.
What the hell good is a 3 billion war chest when your leaders are impotent to exploit it? Why do you think they're sitting on all that cash.
It's because they're busy picking their noses with gold rings on their fingers.
No focus, no vision, no future.
Give me a break.
12-09-2006 @ 3:19PM
syl said...
eBay is a website built on old technology that is not as effective or unique as it was in the past. The feedback system for instance is very easily manipulated and unreliable. But eBay does have one thing, a very very vast userbase. But that's it. I don't see this company keeping their strangle hold in the online auction arena forever. With offerings like Google base, Google checkout, and Craigslist, eBay has a lot to worry about.
12-09-2006 @ 9:21AM
Steve Schmitt said...
Is EBay the only stock that has been all over the board or over valued? I don't think so.... With respect to other companies in this country/world EBay is still a youngster and has a lot of growing up to do. I think it is a good bet for the long term and short term. They have a great idea, they have the lead and now all they have to do is fine tune their service and deal with problems as they arise. I have used their service and own some stock. I believe that it is just a matter of time before the dust settles.
12-09-2006 @ 2:43PM
Brian Snale said...
I still think I'll keep my money in my pocket thanks all the same.
12-09-2006 @ 4:30PM
cherry said...
Future looks bright to me. Do your own homework.
I purchase Ebay shares when they went public and held onto them through the ups and downs and guess what? My returns are over 900% with a long term view and patience.
Annual Technology ConferenceKeynote: eBay Inc.Thursday, November 30, 2006 - 08:00 AM Mountain Standard Time
Robert Swan, CFO
Go here to listen and decipher if what Robert is saying.
http://investor.ebay.com/events.cfm
People need to understand the overall vision, strategy and how the various business unit's will drive current and future growth. Everyone thinks PayPal and Skype was purchased specifically for Ebay MarketPlace but read the slides and you can cleary see how Ebay is strategically laying the groundwork to drive the PayPal and Skype business outside of Ebay.
The ebay financials are strong and the future is very bright.
Have a lovely day everyone!
12-10-2006 @ 4:52AM
JJ said...
imho the new momentum from competitors is having a significant effect on Ebay's share price.
Paypal is generally the only aspect of Ebay that does seem to have any prospects for the long-term, however, it seems Google Checkout are upping the ante in that department. Maybe the new competion that is emerging might actually keep Ebay on their toes.
12-11-2006 @ 10:52AM
Nosy Rosy.... said...
With all that money in their war chest piling up as mentioned above, EBay would do well to consider paying dividends at this point.
Shareholders will not hold this stock forever. A sell-off or meltdown will come eventually.
A nice steady stream of dividends will keep shareholders hanging on even though eBay stock price is lagging.