EBay’s Shares Tumble on Disappointing Forecast

[incniu]

Jul 20, 2017

EBay on Thursday forecast current-quarter profit largely below analysts' estimates, as it continues to invest in marketing as well as in revamping its platforms to attract more shoppers, amid stiff competition from Amazon.com.

EBay has poured millions of dollars into sales and marketing, running TV and social media campaigns, as it tries to promote its revamped platform as well as shed its image of an auctions website.

The company has also invested in product development, tweaking its websites to set a new home page, promote seller listings and remove stagnant ones.

Sales and marketing costs rose 2.4% to $637 million in the second quarter ended June 30, while product development expenses increased 6.1% to $313 million.

San Jose, California-based eBay forecast third-quarter adjusted earnings of 46 to 48 cents per share. Analysts on average were expecting 48 cents per share, according to Thomson Reuters I/B/E/S.

Net income fell to $27 million, or 2 cents per share, in the second quarter ended June 30, from $435 million, or 38 cents per share, a year earlier.

During the quarter, the company recorded an income tax provision of more than $400 million, which dented profit.

Excluding one-time items, eBay earned 45 cents per share, in line with analysts' estimates.

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Revenue rose 4.4% to $2.33 billion, beating analysts' estimates of $2.31 billion.

EBay also announced a $3 billion share repurchase program.

Shares of the company, up about 25% so far this year, dipped 2.4% to $36.30 in after-hours trading on Thursday.

[empirestate]

I don't think eBay has a lot of room to grow... Amazon is KING!.

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[phaz0rz]

I think they have infinite growth potential but they have no idea how to go about growing.

[empirestate]

Originally Posted by phaz0rz

I think they have infinite growth potential but they have no idea how to go about growing.

You should be their CEO phaz0rz!

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[kirkland]

I just started seeing eBay commercials, never seen those before.

I'm amazed at how Amazon has just ballooned into what it is today. Amazon Prime, firestick, Amazon lockers, drone delivery... they've gotten so massive.

[kvncsta]

eBay will eventually disappear or be bought by Amazon.

[yotano211]

Originally Posted by kvncsta

eBay will eventually disappear or be bought by Amazon.

amazon wont be even touching them, anti-trust issues.

[SaiJin]

I highly doubt eBay is going anywhere... yes, Amazon is phenomenal, but eBay still has its uses on other type of selling.

They are different than Amazon.

[vettefever17]

If I were marketing for eBay I would do more specialization in formatting. Many people look at eBay as one of two things, auction housing or discount goods. They've been that way since the creation. Amazon will never have the used niche that eBay has. It will only maybe have it in textbooks.

Now how do you realize the potential of your strengths? You promote the eBay bucks and speed of shipment like they have been doing. You could make auctions more interactive, also. But the mega key that eBay will forever overlook is the giant in the room. Kick off all of the Chinese sellers that clearly break TOS and allow American sellers to fill it. You will kill off probably 25 percent of your cases and increase your customer satisfaction and speed by that much as well. This could lead to a reduction in staffing and major cost with the replacement of the lost revenue coming in from new sellers. You basically kill two birds with one stone.

[james13v]

Originally Posted by vettefever17

If I were marketing for eBay I would do more specialization in formatting. Many people look at eBay as one of two things, auction housing or discount goods. They've been that way since the creation. Amazon will never have the used niche that eBay has. It will only maybe have it in textbooks.

Now how do you realize the potential of your strengths? You promote the eBay bucks and speed of shipment like they have been doing. You could make auctions more interactive, also. But the mega key that eBay will forever overlook is the giant in the room. Kick off all of the Chinese sellers that clearly break TOS and allow American sellers to fill it. You will kill off probably 25 percent of your cases and increase your customer satisfaction and speed by that much as well. This could lead to a reduction in staffing and major cost with the replacement of the lost revenue coming in from new sellers. You basically kill two birds with one stone.

ebay bucks. a whopping 1%!!! WOOOO!!!! Time to SHOP TILL I DROP!!! lol.

sorry. Sore spot for me.

They used to have 2% and up to 8%. I used to make an extra $500 a quarter just for buying. Now? $50?

[rsot]

Originally Posted by kvncsta

eBay will eventually disappear or be bought by Amazon.

Hah highly unlikely

[yankee]

Ebay has become again a yardsale for Chinese sellers. Years ago it was littered with keyword abuse and the search function was worthless. This is similar these days.

If the USA renegotiates NAFTA and eliminates chinese shipping subsidies for third party sellers in china, this will wipe out most of the cheap items because shipping will be a more level field.

The other thing ebay fails to do is market to sellers how the platform can be unique and interactive compared to amazons catalogue and web hosted crappy pictures.

[james13v]

Originally Posted by yankee

Ebay has become again a yardsale for Chinese sellers. Years ago it was littered with keyword abuse and the search function was worthless. This is similar these days.

If the USA renegotiates NAFTA and eliminates chinese shipping subsidies for third party sellers in china, this will wipe out most of the cheap items because shipping will be a more level field.

The other thing ebay fails to do is market to sellers how the platform can be unique and interactive compared to amazons catalogue and web hosted crappy pictures.

If we eliminate Chinese subsidies ( and increase import taxes), it's going to create a lot of havoc. But man, the effects on US business once the dust clears, will be amazing.

[TheEbayNinja]

Originally Posted by kirkland

I just started seeing eBay commercials, never seen those before.

I'm amazed at how Amazon has just ballooned into what it is today. Amazon Prime, firestick, Amazon lockers, drone delivery... they've gotten so massive.

They ballooned by inviting sellers seeking refuge from Ebay to their "market place" and then stealing all their sales data to sell the popular items they sold themselves and then booting them off Amazon if they really were successful to avoid competition. Stealing business sales data and pretty much becoming the Chinese dollar store is what makes Amazon wealthy. If it wasn't for their shady business practices they would still be just another online bookstore.

Every imitation knockoff of a legit product you can find rampant on their website for cheap and people buy it up. The top selling items on their website when it comes to merchandise is always some alibaba crap. Plus now that people just branch of Ebay and Amazon when it comes to running a business only puts them at their mercy instead of opening up an Online store and making Amazon and Ebay have to compete with the inventory of thousands of businesses they put those businesses under their roof so they don't have to worry about competition and basically can end those shops any time they want as many people here have learned the hard way.

They're pretty much unstoppable now. The only thing that can really hurt them is some sort of Embargo act making it harder for those Chinese goods to be sold in the U.S. That would hit ebay and Amazon hard but would be profitable for US sellers

[vettefever17]

Originally Posted by james13v

ebay bucks. a whopping 1%!!! WOOOO!!!! Time to SHOP TILL I DROP!!! lol.

sorry. Sore spot for me.

They used to have 2% and up to 8%. I used to make an extra $500 a quarter just for buying. Now? $50?

I know the EXACT thing you're talking about. I used to buy and flip textbooks and use the eBay bucks to buy essentially free silver American eagles. haha

[vettefever17]

Originally Posted by yankee

Ebay has become again a yardsale for Chinese sellers. Years ago it was littered with keyword abuse and the search function was worthless. This is similar these days.

If the USA renegotiates NAFTA and eliminates chinese shipping subsidies for third party sellers in china, this will wipe out most of the cheap items because shipping will be a more level field.

The other thing ebay fails to do is market to sellers how the platform can be unique and interactive compared to amazons catalogue and web hosted crappy pictures.

That mega gap in profit margin is the killer for a lot of business in the U.S. You can only take USPS discounted shipping so far. Not to mention the vast exchange advantages for the yuan to U.S. dollar.

I am just more shocked at the sheer abuse some Chinese seller with low feedback and extremely poor sales get away with. I almost think eBay has programmed the algos to not touch them in certain aspects.

[empirestate]

Originally Posted by vettefever17

That mega gap in profit margin is the killer for a lot of business in the U.S. You can only take USPS discounted shipping so far. Not to mention the vast exchange advantages for the yuan to U.S. dollar.

I am just more shocked at the sheer abuse some Chinese seller with low feedback and extremely poor sales get away with. I almost think eBay has programmed the algos to not touch them in certain aspects.

That's just ridiculous idea that eBay is bias for Chinese sellers...

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[MM78]

Originally Posted by empirestate

That's just ridiculous idea that eBay is bias for Chinese sellers...

As crazy as that sounds, it doesn't seem too far a stretch.

[vogeltron]

It really seems to depend on what you are selling. Personally I have seen many more individuals start selling products on eBay again because everything is being Gated off on Amazon. I do agree Amazon is still right now king but with all the Third Party Sellers becoming essentially blocked expect to see prices on Amazon rise for Branded Goods and eBay to have a bit of a resurgence for those with established accounts in good standing.

The Amazon customer is definitely less price sensitive but I doubt they will be as price insensitive when the price hikes take place. I don't expect this to affect Private Label. But don't be surprised to see eBay making a comeback. What Amazon is doing is exactly what happened on Bay in like 07-09 they were king then just started throwing everyone off with no explanation. Then Amazon took over and in many ways is following a similar path.

[james13v]

Originally Posted by MM78

As crazy as that sounds, it doesn't seem too far a stretch.

I'm pretty sure he was being sarcastic lol

[james13v]

[yankee]

Originally Posted by empirestate

That's just ridiculous idea that eBay is bias for Chinese sellers...

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They do have less legal issues. My Chinese sellers can sell items from abroad that I can not in the USA without a patent infringement. My market is very nitch but the same concept applies across the entire platform.