eBay Down Further as Morgan Stanley Downgrades

There’s new selling pressure on eBay (EBAY) Thursday morning, after Morgan Stanley’s David Joseph cut his rating on the stock to Equal Weight from Overweight.

“Seller checks and proprietary data indicate that trends deteriorated more than expected in Q3 amid eBay’s ongoing transition in its core marketplace, greater economic sensitivity and poor demand,” he writes in a research note Thursday. Joseph writes that he now expects greater deceleration in global gross merchandise volume in Q3 than previously expected, with a possible year-over-year decline in the U.S. And he also cautions that eBay faces a “challenging holiday season.”

Jospeh also notes that the company’s current issues are likely to linger: he cut estimates not only for Q3 and Q4, but also for 2009. “We have less conviction in eBay’s strategy to transform its core marketplace from an auction-based ‘thrift’ to a transaction-oriented platform that better addresses fixed-price in-season retail,” he writes. Jospeh says he had been thinking that the end of the company’s 3-plus year turnaround would come soon, but that “recent trends are telling us otherwise.”

Joseph cut his Q3 EPS estimate to 40 cents from 42 cents. For Q4, he goes to 48 cents, from 50 cents. And for 2009, he goes to $1.91, from $2.04.

Meanwhile, Pacific Crest’s Steve Weinstein Thursday morning wrote in a note that Q3 should be in line with his estimate of $2.16 billion in revenue and EPS of 41 cents a share. But he also observes that Q3 listings in the U.S. marketplace were below expectations. And he says international monetization seems to be deteriorating due to the weakening economy, the adverse effect of exchange rates and aggressive promotions in some countries, especially Germany and the U.K. His advice: “remains on the sidelines.”

Thursday morning, eBay was down $1.12, or 5.4%, to $19.73; that follows a drop of $1.53 Wednesday.

Comments

[NYM Arts:]

Ebay is Garbage. My Viewership has deteriorated by OVER 85% !
I have 100% feedback with over 570 Satisfied Clients.
I used to sell Over $500 a Week on average of My Special Invention.
Mica Shades Specifically for Antique Lamp Bases : nymarts.com
120 viewers A DAY was not uncommon. Now, an average of Only 20 viewers in a 5 Day Auction. Way Beyond POOR.
I'm Leaving on October 20th, when the "No Paper Transactions" rule kicks in.
I've relocated to : eCrater.com (Very Good) & Onlineauction.com (Fair)
Sellers will return If / when they Rescind the No Paper rule.
Right now I consider myself Unemployed.
In a Perfect World, I would Make Ebay Shine again.

2008 Oct 02 06:26 PM

[o.c.d.colle...:]

The collectibles and antiques marketplace are what gave ebay it's distinction and attraction for the unusual and hard to find items. The minute it became retail it started to lose it's mystique. The millions of antique dealers are now spreading to sites that appreciate their business and treat them accordingly, for the same amount of fees that ebay now demands from it's sellers.Only now they can have customer service, something ebay has NONE of. The network of Worthpoint and it's merger with GoAntiques will be the final nail in ebay's coffin once it gets the technology going for the auctions that ebay no longer wants. As it is now, all of the affiliated sales venues with worthpoint are doing very well, including TIA's which is growing in leaps and bounds, as are the sales and listings on GoAntiques. Ebay will be devoid of anything special or hard to find on it's site. Instead it will have tons of walmart stuff with higher prices, and the new BIG retail sellers will be taking their business to their outside sales venues after the ebay technological problems start to surface for them too!

2008 Oct 03 09:29 AM

[Et tu, Brute!:]

What impeccable timing, eh? Big Box items are always the first to go in a family's budget when recession hits, and NOW I believe we can all agree on that!

How could J.D. have known that while he was stripping the ebay site of the essences (presence) that would have SAVED it during a recession and possible Depression, instead it is left with the very merchandise that is first choice to budget out when the discretionary income becomes lean.

2008 Oct 03 11:11 AM

[Eunice:]

I am an eBay Power Seller. I have in excess of ten thousand 100% positive feedbacks. I have 4.9 DSRs across the board. I have NO use whatsoever for eBay.
The last straw was not the escalating fees. The last straw was not the skyrocketing number of non paying bidders. The last straw was not the advent and growth of the fraudulent buyer (supported entirely by eBay). The last straw was not the death threat against me and my family by a non paying bidder over a $25.00 sale. The last straw was when I forwarded these threatening emails to eBay and got in return a canned response suggesting I provide better customer service to avoid future disputes.
Why would any sane, rational member of civilized society ever want to do business with a corporation like eBay?

2008 Oct 03 03:49 PM

[pwrsellr:]

Then: In its heyday Ebay used to tout three things: 1) That a winning bid is a CONTRACT between buyer and seller that BOTH had to honor. 2) Whenever there was an issue or a challenge, Ebay would say “we are only a venue” and have no control over the transaction between buyer and seller. 3) That the Ebay site was a “level playing field” between buyers and sellers and between Mom/Pop small sellers and behemoth corporate sellers. All played by the same rules.

Now: A winning bid is a contract that ONLY THE SELLER has to honor. The buyers can demand [and get] any number of concessions from the seller by threatening to leave bad DSR’s…all they have to do is call the seller so there is no MY MESSAGES or email record. Ebay will do nothing. We sellers cannot tell the truth [through feedback] about bidders who don't pay, pay MUCH later than auction terms state, who bounce checks, or who cheat the seller through bogus claims and return empty packages for full refunds that Paypal will award them in a heartbeat. In addition, these same bidders can knock a good seller off Ebay for 30 days by annihilating them in DSRs which they can leave even though they do not pay. We get rated on "communication" even though there is no requirement for the bidder to have a correct email address. There may be a different email address attached to the Ebay account but the current email address is attached to the Paypal account. So even if you contact them through MY MESSAGES they won't receive it unless they log onto Ebay...but can bash a seller in DSRs because the seller didn't communicate!

Bidders can "award" a failing grade [anything under a "4" out of "5" is failing according to Ebay] for rules that aren't even part of Ebay's policies like "failing to leave feedback first". Ebay doesn't make a differentiation to bidders that "Shipping time" is NOT "delivery time" as sellers who ship the same day have no control over when that package is actually DELIVERED. So bidders fail sellers when the USPS or UPS or Customs delays a shipment even though that seller shipped the SAME DAY payment was received.

The “we are only a venue” thing…HA! Ebay now controls HOW something is listed, HOW it can be paid for, WHERE the items show up in search, HOW MANY items can be listed [regardless of how many are paid for to be listed} etc. Think of it this way…WHAT LANDLORD of a bricks and mortar retailer tells a retailer what credit cards to accept, what items to sell, and that customers have been complaining so a retailer HAS to allow all students coming in to shop to carry backpacks without being searched. And tells the retailer how much they can charge for shipping and handling. How long before that bricks and mortar retailer moves to a more resonable site…or goes out of business.

In essence, this is what Ebay is doing as a landlord to sellers with these changes.

It is no longer a level playing field: a) Buyers can leave negative and neutral feedback for sellers but sellers cannot inform other sellers by feedback when a buyer cheats them or doesn’t honor their committment to the “ebay contract” when making the purchase. Buyers can leave subjective and anonymous DSRs about sellers with impunity sometimes causing sellers to NOT BE ABLE TO LIST FOR 30 DAYS and the buyers can just MAKE UP A REASON to do so. [Ebay gives buyers no parameters [or ultra weak ones] for what the DSR levels mean and how to rate sellers. Getting slammed unfairly by buyers can also make listings unfindable by other buyers through BEST MATCH EVEN THOUGH sellers PAY THE SAME FEES to list their items. b) Small sellers now have different rules and fees from corporate sellers…so the corporate sellers can undercut the Mom and Pops because their fee structure is “enhanced”.

So the Mom & Pops sellers can no longer compete and are getting slammed by unscrupulous buyers in DSRs so they are leaving…taking with them the unique cutesy items that made Ebay a fun place to shop for buyers. Without the unique cutesy items, the good buyers are leaving too.

Sellers will leave and won’t buy either. As they go and the Ebay broken and draconian search engine keeps the buyers left from finding their unique treasures…I hope the new management can sleep at night with their handiwork.

And yet Ebay, who cannot field a decent customer service department that CARES that could rid the site of bad sellers AND buyers, spends tons of money changing ITEM pages and MY EBAY 4-5 times a year WHEN IT DOES NOT NEED TO BE CHANGED. BTW when is the last time Amazon changed its pages? Putting lipstick on a pig with these superficial changes doesn’t change the fact that it’s a pig.


You think LAST YEAR’S Ebay Live, which used to be a cult-like positive cheerleading event, was a disaster…wait until THIS YEAR! Ebay may have to PAY sellers to show up to a venue that people were once treating like a Yankees/Red Sox World Series event.

And with all of the above “enhancements” sellers are asked to pay fee increases up to 43% and are now required to use Paypal only…thus eliminating the 20% of buyers who ONLY pay by money order or check. Oh! and as punishment for Ebay’s not accepting Google Checkout, EBAY’S searches have been lowered in GOOGLE’S BEST MATCH further hurting sellers AND buyers! Hah!

Ebay will implode.

2008 Oct 03 04:15 PM

[Et tu, Brute!:]

ebay stock dropping like a rock. Perception I think is the company is becoming tainted.

Pity.

2008 Oct 04 02:19 AM

[TheLOSERisEBAY:]

The Gutter of EBAY......EBAY has BECOME THE Most INCOMPETENT Place. They Had a really Great Place where people loved to Buy & Sell. They have completely offended most of their Sellers who have been loyal to them for over a decade. Not only will they lose many many of their POWERSELLERS but they will also pull their stock - which Includes me. I would never own stock with a company that treats their clients like CRAP. Since the introduction of DONAHUE....THEY HAVE BECOME the NASTIEST PLACE. Instead of implementing policies that could have built up their business they have CHOSEN to OFFEND Just about everyone. THEIR STOCKS WILL CONTINUE TO go TOWARDS the GUTTER even when the World Economy begins to REVIVE. I PROMISE. PERHAPS GOOGLE will Begin a SELLING SITE to COMPETE. I think not only I but most of the EBAYERS Would move on. DONAHUE Has WRECKED Ebay forever. !!!

2008 Nov 07 01:36 PM

[TheLOSERisEBAY:]

DONAHUE MUST BE Too SELF OBSESSED .... to realize He could have just divided up ebay into two sites, & Cure the issue. INSTEAD OF Angering his ENTIRE SELLER BASE. WHY ON EARTH Would someone do that to their BREAD & BUTTER?? He Obviously does not GET that Sellers are Buyers too. He loses his SELLER BASE ....... He loses his BUYER base. EBAY is TOAST. & Stockholders hold EMPTY HOLLOW STOCK. EBAY BECOMES Yesterdays News. !!!!!!

2008 Nov 07 01:44 PM