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eBay's 'Uber Of E-Commerce Business' May Be Worth $18 Billion Too
- The recent news that eBay’s local delivery plans are unraveling is misleading.
- In reality, eBay/Shutl is heir apparent to the crown 'Uber of E-Commerce'.
- EBay's enterprise valuation stands at $59 billion (52-week low) and Uber at $18 billion (proposed).
- Perhaps if the market understood Shutl better, eBay's stock would be worth 30% more (e.g. $59 billion plus $18 billion).
E-Commerce Valuation: Offering Guidance For Buyers And Sellers
- Valuation is about judgment, and multiples from a new E-Commerce Valuation Index (contained in this article) provide a framework for making value judgments.
- Multiples based on Enterprise Value (EV) are independent of capital structure, so are of particular interest in stock trading, M&A and transactions of private companies.
- (EV/ EBITDA) is a proxy for free cash flows and to date is the most popular of the EV based multiples (e.g. Amazon's is currently 45.1xs, the median is 18.5xs).
- Based on experience selling e-commerce companies to large Strategics and PE groups in M&A auctions, rates of gross margin expansion (or contraction) may capture future prospects, better than EBITDA.
- I propose that (EV/ Growth-Adjusted Gross Profit) be adopted as the new standard of relative value for e-commerce companies, and have developed a proprietary formula.
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