eBay / Gmarket: Four Reasons the Deal Makes Sense

So news emerges that eBay (EBAY) is in discussions to acquire a minority stake of around 37% in Gmarket (GMKT). This makes a lot of sense to me.

First, the plan fits perfectly into EBAY's expansion through partnership model.

Second, even though EBAY's existing wholly-owned auction.co.kr platform in Korea is suppose to be doing reasonably well, Gmarket has the momentum and is more likely to become a major player in the broader Asia.

Third, the stake could offer yet another entry point for PayPal in Asia.

And finally, Gmarket's valuation, relative to its growth prospects, is very reasonable.

Comments

[Ryo:]

very clear analysis. helpful. Thanks.

2008 Aug 14 08:58 PM

[Et tu, Brute!:]

As usual, meaningless drivel! ebay keeps dabbling here, there, and yon squandering funds acquiring portions of other companies while it's stock continues a steady downward path. More good after bad is thrown away buying back this awful stock.

Meanwhile, back at the ranch, the onetime darlin' known as ebay (proper) is hopeleslly broken. The focus should be there. It just gets steadily worse and worse. These bits and pieces of company won't save the titanic, and paypal is so awful I'll not even get started on that.

Funnily enought, the U.S. and the U.K. have been the most "legal tolerant" of countries; the rest of the planet is clamping down on ebay. And ebay is broke... bad.

You know, there's a saying, it's pretty old, and there's a reason for that! A house divided....

2008 Aug 14 10:26 PM