Seeking Alpha

eBay falls below $50 on fresh Google worries

  • eBay's (EBAY -2.1%) traffic growth declined meaningfully in late May following the rollout of Google search algorithm changes, writes Baird's Colin Sebastian.
  • Sebastian also thinks eBay's security breach and pre-Memorial Day softness may have taken a toll.
  • An initial analysis from SearchEngine Journal estimated eBay saw a 33% drop in Google search traffic following algorithm changes, and SEO firm Wordstream estimated eBay had "lost around 75%" of its keyword terms from Page 1 of Google's results.
  • Like others, Sebastian expects eBay to adapt to Google's changes. He also sees the company buying more of Google's product listing ads (PLAs).
  • Previous: Wells Fargo cuts eBay PT on security/search worries
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Comments (12)
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    $45 level is good entry if it gets there. Stock should continue to price in these lower expectations before earnings report.
    6 Jun 2014, 12:24 PM Reply Like
  • Seeker137
    , contributor
    Comments (393) | Send Message
     
    Ebay's spin doctors of "stock valuation" would like to distract from the massive impact of the hacking event, eBay's mishandling of it, and the endless bad publicity fallout from it. Even now CEO Donahoe is talking about PayPal embracing BitCoin (in an attempt to distract away from the hacking and this Google Panda issue and it's impact on eBay).
    6 Jun 2014, 12:57 PM Reply Like
  • dastickup
    , contributor
    Comments (80) | Send Message
     
    Wow what a big move. 50 whole cents. If the stock didn't fall big on the day that hacking news broke what makes you think it will fall because of it two weeks later. The public has a short memory and business will keep on running. This is nothing but a hiccup in the long term.
    6 Jun 2014, 03:01 PM Reply Like
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    I agree dastickup. I am long eBay and if it does happen to weaken further near the $45 level, I will accumulate.
    6 Jun 2014, 03:03 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (1080) | Send Message
     
    eBay is a tired, old business. The only thing that is of any interest is the PayPal segment which eBay refuses to spin out. Until they do, management should just post a sign on their front door stating "No Growth Here".

     

    Just a personal note as an almost 2 decade user of eBay... the company deserves all the negative comments it receives. Frankly, they forced sellers to find other options by the sh*tty way they treat their customers (the sellers). Capitalism in action, in my opinion.
    7 Jun 2014, 01:24 PM Reply Like
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    As an investor I like the long-term prospects of owning a company growing revenue 14% a year over the next couple years and generating over $4 billion in free cash flow.

     

    Despite a little negative sentiment, the company is approaching $21 billion in sales by 2015 so the no-growth claims is hyperbole. Merchandise sales are still above 12% and will pick up. Paypal is near 20%. Today's price is a good value, anything approaching $45/share will be gravy.
    7 Jun 2014, 02:32 PM Reply Like
  • Seeker137
    , contributor
    Comments (393) | Send Message
     
    eBay stock is designed for speculation. Chief insiders never hold... which is an indictment of the pump 'n' dump nature of this stock. Donahoe and other top brass insiders never hold their deferred compensation shares. They dump them as soon as they've received them, showing no confidence in their own company. Very few people 'invest' in eBay, they speculate on it. Much of the share price increases that are ever seen in this stock are due to their own repurchases of their own shares and is never long lived. Only a sucker would purchase eBay shares to hold.
    6 Jun 2014, 05:12 PM Reply Like
  • James Sands
    , contributor
    Comments (2433) | Send Message
     
    By default of your statement, I am a sucker.
    6 Jun 2014, 05:39 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11900) | Send Message
     
    eBay needs to change its algorithms as does their partners. Unfortunately that means their sites must have real information and not just sales garbage. Even so, Google's change is good for those looking for information and not just junk advertising all the time.
    7 Jun 2014, 03:10 AM Reply Like
  • CARLVP
    , contributor
    Comments (25) | Send Message
     
    Makes one wonder if Donahoe and his board cronies and Obummer and his regime cronies operate on the same page.

     

    Anyone with a room temperature IQ and amnesia knows PayPal would go ballistic if spun off to the shareholders' like anyone with a room temperature IQ and amnesia knows building the XL would be good for jobs and economy, as well as releasing some of the five worst terrorists the world has ever know is bad for the USA and world.
    7 Jun 2014, 05:49 AM Reply Like
  • ianxponent
    , contributor
    Comments (648) | Send Message
     
    Wow, great snark!
    7 Jun 2014, 07:18 PM Reply Like
  • sdraziw
    , contributor
    Comments (25) | Send Message
     
    ebay is going to get picked off... no doubt... plus they have like 2.8 billion left on their share repurchase authorization... i read their 10Q... If i was Google I would buy them just to get paypal... no doubt... ebay is going to bounce big time... just be patient...
    8 Jun 2014, 08:30 PM Reply Like
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