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Will eBay (NASDAQ: EBAY) swing wildly on earnings? It is a possibility looking back at some of the past moves of this stock. While I can't tell you what will happen, I can tell you what has happened the last time the company has failed to meet expectations ... it plummeted 21%!
Looking back over the last three years, the stock has moved on average of 8.1% on earnings. (That is the close of the day before earnings to the close the day after earnings.) Sometime it was up; sometimes down. In the fourth quarter of '04, the stock reported 16 cents per share against expectations of 18 cents per share and plummeted 21.7%. But don't auction off those shares just yet. In the second quarter of '05 the stock surprised with 22 cents when Wall Street was expecting 18 cents and the stock surged a whopping 19%. More recently, in the fourth quarter of 06, the stock came in with 31 cents, beating 28 cents expectations and gained 13.4%.
The number to beat this time is 33 cents per share, as that is what the analysts are expecting eBay to report on October 17. If it will beat that number is anyone's guess, but clearly the stock has volatility and can rise or fall depending on the number.
Do you think Ebay will surprise or disappoint this time?
Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.
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