eBays finances have never looked in a worse position

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eBay contines to slide as it ignors it's members

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Well it looks like the revenue for eBay is continuing to slid along with assets whilst liabilities march upwards and this comes at a time when you would expect more and more people would be turning more towards on-line auction as a way of saving money during these difficult time.

The honeymoon period with users is well and truly over as eBay retreats away from it's small time sellers and action prices and heads towards dealing with the big boys at fixed prices and mandatory P&P that annoyed many sellers whilst increasing eBays profits which clearly could do with a boost.

The drop in revenue is also mirrored by the drop in gross profit and take into account many of the job loses at eBay that continues to frustrate buyers and sellers alike who find themselves talking to automated machines.

Looking into the future it seems that Amazon continues to gain market share and rumors are adrift that Google might be planning to enter the market directly competing with eBay on it’s home turf and turning to share price we can see some nervous investors dumping shares.

As the chart show from the 22 points at the start of the year prices have behaved quite well and now standing at 16 points however they may test the lows again unless eBay pulls something out of the hat and this is confirmed from the cash flows and when you look at the equity values over the same period they remain remarkable unchanged so one must assume eBay got it right when buying commercial real estate.

Ebay announced back in march that it wants to IPO Skype which I feel is one of eBay better half’s with the sale to take place in 2010 but if market conditions worsen over the next year then this might leave eBay short on cash.

Customers on eBays trading platform may start to migrate at an increasing rate as security concerns now turn people off and one report puts the number of people that have been scammed on eBay as high as 60% and this accounts for a disproportionate amount of criminal activity so lets move on to what investors are saying the future holds for eBay as we march towards the end of another decade that has certainly been eventful.

How Unhappy Are eBay Investors With John Donahoe
Published: 10/09/2008

There is actually something worse for investors than losing a lot of money and that's losing a lot more money. So eBay's bruised supporters can't be impressed with the leadership of John Donahoe which has seen the company's stock price hugely underperform the NASDAQ benchmark since he took over. In the six months leading up to yesterday's markets closing the NASDAQ benchmark has lost marginally less than 30%. A dreadful number on the face of it but that looks almost like good news when compared to the decline of more than 49% that eBay's stock has suffered in the same 6 month period. full story

It is no secret nor any bold statement that eBay has lost its lusterand lost its charm as an investment if you have been a holder for verylong. With a 52-week trading range of $10.91 to $33.47 and with sharesat $12.82 today after a 2% gain, you can see that this has been abrutal stock.

A new CEO has failed to invigorate shares. The growth is no longer there, at least not in the U.S. Now those holding auctions face aneven more skeptical client base that will balk at fee changes. ButeBay does have what few other online companies have in the U.S.: actualcompetition. Amazon.com can easily compete against it in the onlinestore front arena, but every other major online auction format is sofar behind that you can’t likely count even 3 other real alternatives. full story

These are tough times all around, but why then are eBay's competitors chiefly Amazon, but also Taobao in China and GMarket in Korea fairing so much better.

One big reason is that virtually no one cares anymore about eBay's original business, the online auction. When is the last time you heard someone all breathless about bidding on some tatty piece of furniture.
Part of the problem is no one is spending money on furniture or anything at the moment, but compounding the issue for eBay is that a lot of people just aren't hassling with auctions anymore. full story

I really want to see eBay returning to it’s roots when it took onboard it’s members concerns and adapted but now members are treated with contempt by the automated complaints system that churns out replies that are nothing to do with the problem being reported and unless eBay starts to listen to it’s members then it will continue it’s fall from grace and is not something I would care to invest in.

News flash 10/11/2009 as predicted results are in and eBays profits are down 29%

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