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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!
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."
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's upgrade
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.