Not a good day for eBay (EBAY) shares, which are down 23% for the year to date, and now sit at their lowest level since 2001.
Highlighting the problem of counterfeit merchandise sold on the site, Bloomberg reports that the company provided a tip to German police that triggered the seizure of 20 tons of knock-off designer clothing last month. While it is certainly good to see eBay taking an aggressive posture on fake goods, the company clearly has an issue to resolve here. As Bernstein Research analyst Jeffrey Lindsay notes in the story, eBay is “only as good as its worst seller in the minds of its customers.”
The story also notes that eBay has been sued by a number of luxury brands for not doing enough to insure that sellers don’t peddle fakes. Among those who have filed suit over the issue are L’Oreal, LVMH Moet Hennessy Louis Vuittton, Rolex and Hermes International.
Meanwhile, eBay CEO John Donahoe and CFO Bob Swan Thursday spoke at the Goldman Sachs conference in San Francisco. According to a research note this morning from Goldman analyst James Mitchell, they indicated that a further reduction in insertion fees are not imminent, but that they will trend lower over time. They also said that the company is willing to sell Skype at the right price.
In Friday’s trading, EBAY was down 58 cents, or 5.1%, to $10.87.
