- Jeetil Patel - Deutche Bank has seen the problems all along. He is sometimes a lone voice in the wilderness. " We reiterate our SELL on shares of eBay, and are lowering our price target to $13. We think the stock will remain under pressure, particularly as business trends onsite appear to have worsened dramatically in September, largely due to the structural issues facing eBay (lack of demand, increasing seller fees, lack of reinvestment).
- Scott Devitt - Steifel Nicholas - Scott still has a buy rating on the stock, but admits: "Unfortunately, our view of the stock has been mostly wrong, but we believe that current share prices more than reflect the significant headwinds facing the business."
- Justin Post - Merrill Lynch - Justing just recently downgraded the stock to underperform. "Given magnitude of eBay's 3Q GMV miss ($14.3bn vs $14.9bn expected) and weaker 4Q guidance, results have a negative read-across for AMZN and GOOG. However, eBay sellers as well as private and public eCommerce companies have indicated more deterioration on eBay than other channels and off-eBay PayPal volumes beat our estimate by $260mn. We are incrementally more cautious on sector, but believe some of eBay's 3Q $640mn GMV miss likely moved to AMZN."
- Mark Mahaney - CitiGroup - Mark recently downgraded the stock to a hold and had this to say; "What's Gone Wrong? - 1) Macro -- negatively impacting eBay, PayPal, StubHub, everything; 2) Execution -- fee/rule marketplace changes have been highly disruptive & arguably poorly implemented; & 3) Structural - Decreasingly desirable Auction format & an infrastructure-less business model arguably ill-equipped to match rising consumer requirements."
Thursday, October 16, 2008
The Morning After - eBay's 3Q Conference Call.
Somehow this post feels like I'm just piling onto to eBay when they are down. It almost seems unfair since they are so vulnerable, but after 2 years of blogging about eBay, I finally feel vindicated. The analysts and the press are finally seeing the light.
What the Press has been Saying
There were two excellent articles recently by Victoria Barrett of Forbes and Brad Stone of the New York Times. These are the first two articles to identify the real problem with eBay and it isn't eBay sellers.
What the analysts are saying:
Other than Jeetil Patel of Deutche Bank, most analysts have felt that eBay was an undervalued stock, that had a few problems in the marketplace business, but they were still bullish. Now that there is irrefutable evidence that the demand for eBay items is declining and the structural problems are clear to be seen, they have finally changed their tune.
If you listened to the conference call John Donahoe and Bob Swan blamed all of this on the economy; the macro-economic environment. But next week, Amazon will announce their 3Q numbers and Q4 guidance and while they may be impacted slightly by the macro-economic environment, their numbers will not be anywhere as dire as eBay.
This year, Amazon put eBay in their rear-view mirror, but I believe this holiday season they will put eBay out of view completely. This should never have happened and short of the Board of Directors pressing the reset button on this management team, the eBay marketplace will not recover.
Just my 15%