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eBay Claws Way Out Of “Sell” Wasteland

Rated "hold" with room for improvement

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It may be time for investors to stop feverishly disposing of their eBay shares.  Financial firm Collins Stewart has given the online auction company a small nod of approval by upgrading it from "sell" to "hold." 

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Are there any "Arrested Development" fans out there?  This change is reminiscent of the times Jim Cramer upgraded the fictional Bluth Company from "triple sell" to "don’t buy" to "risky"; since Collins Stewart’s Sandeep Aggarwal took a fair amount of time to focus on problems, the adjustment doesn’t translate to an incredibly strong endorsement.

Still, as reported by Henry Blodget, Aggarwal wrote, "[W]e are upgrading shares of eBay from a Sell to a Hold as the shares came within 3.0% of our $10 PT. . . .  [W]e believe that at the current level the downside risk is limited (trading at 6.5x our ’09 EPS)."

He later continued, "eBay remains one of the largest E-Commerce destinations with immense long-term potential.  We will be more constructive if we see signs of improvement in Marketplaces’ metrics, higher adoption of Bill Me Later without negative impact on PayPal take-rate, or if the shares dip below $10."

So perhaps investors should even get ready to start buying shares; eBay’s down 0.29 percent at the moment, which puts it at $10.45.

 

>>> Is it time to buy eBay stock?

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eBay Claws Way Out Of “Sell” Wasteland
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  • Guest

    I think the “upgrade” article’s analysis is a great example of how following some basic figures can be misleading. A “walking around” type analysis – what’s actually happening on the ground – can’t be beat. In Ebay’s case there are lots of astute observations from the front, usually from long time sellers who are saddened and disappointed that EBAY has developed to such a point as to be almost unuseable. With these sellers’ departure, many of the cool and expensive items go, the eyeballs go, the advertising revenue goes – and well, the company follows. Sure, there’s still lots of cash in the till and lots of (tacky) items for sale but the trend is strongly downward. There’s been such a negative branding developed, that even if top management did the right thing – and quit – Ebay will be a long time coming back to what it was. Sad.

  • Patricia013

    As a long time (10+ years) seller on Ebay I know first hand what is happening there which is why I found it shocking that any analysts would rate their stock a hold. I have no idea what the lure is to Ebay. Yes, they are a big company but they are now woefully mismanaged and losing money and sellers (who are also buyers) on a daily basis. In 2007 I never would have dreamed that by now I would have closed my Ebay store and dwindled my listings down to only 12 on Ebay while I beefed up my lisings on my website, Etsy.com and Bonanzle.com. All these analysts have to do is go to Ebay’s own discussion boards…I suggest Seller Central. One visit there would tell them that Ebay is a sick company and can only weaken as one disasterous quarter after another comes down the pike – they couldn’t even profit during the holiday season!! John Donahoe stubbornly refuses to turn the ship around and ignores the fact that it is slowly starting to sink. What part of that cannot be understood? …what part of that smacks of success? Its not like hundreds of sellers aren’t telling you ALL the same thing. Its not like Ebay’s own discussion boards aren’t full of the same complaints! Hold onto Ebay and become a fool!

  • Truthtime

    Search the internet for “Ebay Stockholders and Sellers Calling For Immediate Termination of John Donohoe CEO Petition”

  • Auld Cynical

    One of the principal drivers of Ebay’s decline has been the disconect between investors and the actual customers.

    Now is a good time to invest only if you intend to use your investment to foster a very radical change in governance and management at the next AGM.

  • http://nymarts.com NYM Arts

    Financial firm Collins Stewart must be HALLUCINATING !
    All of us on the INSIDE know Ebay will grind down to ZERO, and is just not a good thing to put our Money on.
    Purchasing shares of Ebay is equal to buying stock in a Poison Mindset that STEAMROLLS the Constitution and the Sherman Act. And you can’t have Freedom in America without these Two Very Integral Things.
    So, when considering buying Ebay Stock….PASS.

  • http://randomplaza.com/help.anonymous.php Brave Agent Pubeit

    The way for eBay to save itself is if it treated PayPal as a scammer company, which everyone on the internet not brainwashed by their false advertising considers it.

  • Robert

    Ebay is soooooooooooo unfair to sellers with their new feedback policy.

  • Guest

    I’m only one of hundreds of former eBay sellers who have abandoned eBay for other auction sites that give us an equal opportunity to rate buyers as they have to rate us; who do not force preferential payment methods upon our buyers and whose listing and other fees are a fraction of what eBay’s are currently.

    Investors would be wise to search out these companies — the business models of which are based upon what eBay used to be years ago — for possible investment opportunities, rather than shoring up a failing enterprise such as eBay has become.

  • http://www.durashopping.com Guest

    Hold and hope you can sell at a better price soon. But if you dont already have shares I would not buy any. Ebay was on its way out before the market got to where it is now. With people out of work and companys going under at a recored pace I dont see much hope for ebay. Why would sellers waste money on ebays fees and put up with all the other problems just to sell on ebay? Sellers can find lots of other great ways to sell online. I did. I paid ebay hundreds in fees every month until I got my own website and domain name. Now I can sell all the products I want and I only pay $20 a month for hoasting. And I did not need to know any HTML or programing (the site was setup for me) and I can accept any payment method I want. Screw Paypal. More and more sellers are starting to do this. And without sellers Ebay is done. No sellers = no fees = no money = no ebay.

    Jump off this ship before you go down with it.
    Go on over to http://www.durashopping.com/new
    And get yourself a nice new website and domain name for just $20 a month. Sell all the products you want and pay no fees. Why give your profits to ebay?