EBay Stock Falls Amid Slowing Near-term Trends -- Update
By Maria Armental
Online marketplace eBay Inc.'s stock fell 7.5% on Thursday
following third-quarter results that showed profit and revenue
gains but also slowing near-term trends.
Shares, which traded as low as $48.03, closed at $49.28, making
it the second-worst performer in the S&P 500.
The company, which at 25 years old is considered an online
shopping pioneer, boasts some 183 million buyers and nearly 19
Once a highflying internet conglomerate with brands like PayPal
and StubHub, eBay has been moving to focus on its core business.
The sale of its classified-ads business is expected to close in the
"We are in the first phase of a multiyear journey, [with] many
tech-led improvements for buyers and sellers yet to come," Chief
Executive Jamie Iannone said in an earnings call.
For example, Mr. Iannone said, eBay improved search results to
help buyers find items, which already helped sales in the most
Revenue for the quarter rose to $2.61 billion, with $2.4 billion
of transaction revenue, company officials said, pointing to
strength in payments and advertising partially offsetting the
deceleration in gross merchandise value, a key performance metric
that looks at the total value of goods sold.
But Rick Watson, an internet retail veteran who now runs
e-commerce consultancy RMW Commerce Consulting, said eBay discussed
incremental improvements, but "I did not hear a single major
initiative ... that would chart a new course for eBay."
Mr. Watson pointed to positives, like the increase in active
users and gross merchandise value. But it's not clear eBay is
specifically doing anything other than benefiting from cyclical
trends, COVID, etc., Mr. Watson said, adding that ultimately, he
feels eBay seems to be on a Yahoo-like decline, and is still in
need of a major reset.
Company officials declined to comment Thursday through a
spokesperson, pointing instead to statements during the earnings
call including Mr. Iannone's saying that eBay sees "a long runway
to accelerate GMV growth given the $500 billion global total
addressable market we are competing for, but it will take
Write to Maria Armental at email@example.com
(END) Dow Jones Newswires
October 29, 2020 16:33 ET (20:33 GMT)
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