Tuesday, May 29, 2007

The Power Of Bloggers To Affect eBay’s Stock!

I wouldn’t imagine that many eBay bloggers believe in their individual power to affect eBay’s stock price, either positively or negatively but in the aggregate there may be some validity to the concept.

eBay is an unbelievably profitable company with a fantastic balance sheet and they consistently exceed analyst’s estimates on earnings quarter after quarter. eBay is buying back stock and investors have already priced in the Skype purchase -- more like written it off. So, why is the stock having a hard time staying above $34 a share? In fact, even after a stellar first quarter earnings report eBay’s stock price hardly budged. While Amazon, on far less profit sees their stock skyrocket.

Do bloggers have any influence? I think the case can be made that bloggers in the aggregate can have a major impact on a stock price. Stock analysts are now quoting Bloggers and Blog rumors and scoops can have a temporary impact either up or down on a stock price. Investors are seeking out information -- the inside scoop -- on a particular stock, to give them an edge. Sure, this information has to come from a reliable informed source but if the sentiment of a majority of blogs dealing with a particular stock has a bearish tone it may have an impact on the stock price. This has got to really tick off management since they can't control the message. I know this is the case with eBay’s management -- inside info here.

In eBay’s case the sentiment of most bloggers covering the company is bearish IMO, therefore the stock is having a difficult time gaining any upside traction. I don’t think any one blog can cause this phenomenon and certainly many blogs are poorly written or pure speculation – I don’t speculate I analyze -- but when you have hundreds if not thousands of blogs saying the same things it is bound to have an impact.

Investors, if you want to get a feel for the direction of a stock, pay close attention to the chatter in the Blogosphere it may give you an edge.

Just my 5 Cents!


Anonymous said...

Ebay's new best match search & the new FB system (giving extreme power to buyers) is impacting buyers and seller's alike, and I don't mean in a good way.

Sellers profits are taking a real dive and the ebay decision makers do not seem to give a dam. They are so intent on doing it their way they refuse to listen to reason.

So I do believe ebay will continue to loose ground financially in an unprecedented way and they have no one to blame but their own decision makes.

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