eBay's Stock hit the $33 mark today at 12:31 EST. but what explains the increase from the 52 week low of $22.83 in early August? Overall eBay is sitting on a ton of cash $3 billion, is still generating large amounts of free cash flow, has zero debt, has been buying back it's stock, and appears to have survived the seller crisis that developed when they raised fees. The market as a whole is rising and eBay's peers are doing well. So there’s your answer.
Investors, lets not get over exuberant though, eBay lowered 4th quarter earnings targets as well as 2007 guidance so eBay's management isn't exactly feeling bullish going forward. While eBay may hit there revised 4th quarter numbers they will be experiencing more seller unrest after the holidays as the sellers that hung on through the holidays leave the site. Also January is when they always announce fee increases so get ready for a new round of seller unrest during the first quarter.
Now Randy Smythe from the investment firm of Smythe, Stern and Lippman (Tell the SEC I’m only kidding and if you follow my advise your nuts …. unless of course I’m correct in my analysis) is initiating coverage as Peer Perform with a year end target of $35. For you longs out there though the stock price will settle in once again around $30 for most if not all of 2007 so if you bought at anything under $35 pick your spots because $35 will be the high for the next 52 weeks unless eBay makes some significant changes.
See I can be an analyst too. I should be added to the list of Analyst's covering eBay's stock. I’m not the Motley Fool but I can make predictions with the best of them. I wonder if the press will cover my predictions. Tell your friends.
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