Tue, Mar. 17, 4:02 PM
- Facebook (FB +1.7%) is updating its PC and mobile Messenger apps to allow users to send cash (via debit cards) to friends. A user sending money simply has to tap a $ icon, enter an amount, and tap a Pay button; a PIN can be created to provide security.
- Facebook is less than a year removed from hiring ex-PayPal chief David Marcus to run Messenger. Mark Zuckerberg, for his part, has suggested for a while payments will be a part of Facebook's efforts to monetize Messenger, which has 500M+ MAUs thanks in part to Facebook's decision to remove messaging functionality from its core apps.
- Many think WhatsApp, currently monetized in some markets via subscription fees, will eventually join rival messaging platforms in supporting payments. Facebook has promised it won't run ads on WhatsApp, and has more broadly argued ads aren't a good way to monetize messaging apps.
- PayPal owner eBay (EBAY -0.1%) has ticked lower following Facebook's announcement. For now, Facebook's platform doesn't support merchant payments, which account for a far larger percentage of PayPal's transaction volume than consumer-to-consumer payments.
Tue, Mar. 17, 1:59 AM
- eBay (NASDAQ:EBAY) is taking another step into high-end auctions, launching a new area of its website built specifically for auction house Sotheby's (NYSE:BID).
- The new platform - ebay.com/sothebys - will stream Sotheby's New York auctions live beginning next month, bringing the company's vast inventory to a new audience in the hopes of boosting sales and prices.
Fri, Mar. 13, 2:37 PM
- Susquehanna's James Friedman: "As we have observed in prior studies, although Visa, MasterCard and Amex are accepted by 100% of the top 100 Internet Retailers, PayPal is only 68% penetrated ... #1 Amazon, #3 Staples, #6 QVC and #8 Macy’s don’t take PayPal. Our conversations with a number of merchant acquirers – some of which resell PayPal – suggest early dialogue regarding acceptance post spin are improving."
- Friedman, who has upgraded eBay (EBAY -1.1%) to Positive and hiked his target by $16 to $75, thinks new deals with merchants currently squeamish about partnering with PayPal (due to the fact they compete with eBay's Marketplaces unit) "could add hundreds of basis points to [PayPal's] growth." Dan Loeb argued something similar while confirming his eBay position last October.
- Also: Friedman believes PayPal could see a 7%-8% earnings boost from pending European payment card interchange fee reductions. His DCF analysis grants PayPal a $62B enterprise value, and assumes a 16% cash flow CAGR from 2015 to 2024.
- In spite of the upgrade, eBay has followed markets lower. Shares remain close to a 52-week high of $60.93 (set on Monday).
Tue, Mar. 10, 12:51 PM
- ChannelAdvisor (ECOM -3.6%) clients saw their Amazon (AMZN -2.1%) same-store sales rise 22.7% Y/Y in February. That's down from January 27%, and also below the growth seen during 9 of the prior 10 months (December being the exception). Growth peaked at 45.1% in August.
- 38% of tracked Amazon sales relied on Amazon's fulfillment services (FBA), up from 32.2% a year earlier. 2.3% of sales relying on FBA involved non-Amazon transactions. Amazon stated in its Q4 report 3rd-party sellers using FBA grew 65% in 2014, and made up over 40% of Q4 3rd-party units.
- eBay (EBAY -2.5%) continues to lose share: Its ChannelAdvisor same-store sales grew 5.1% in February, down from January's 6.8% and below total U.S. e-commerce growth of 15% (per comScore) - auctions -26.2%, fixed-pride +8.6%, Motors +25.2%. eBay is coming off a Q4 in which its Marketplaces GMV only rose 2% Y/Y (3% U.S. growth, 1% international).
- Search ad-based same-store sales (largely involving Google ads) rose 10.7%, with rising clicks and orders offsetting declining ad prices. Google Shopping-related (NASDAQ:GOOG) same-store sales grew 20.7%.
- Amazon and eBay are both underperforming on a down day for equities. Amazon's volume has been below-average, and eBay's above-average.
Mon, Mar. 9, 12:21 PM
- Globes reports PayPal (EBAY +1%) has bought CyActive, an Israeli provider of malware-protection software that relies on algorithms to predict future attacks, for $60M. ZDNet also reports of a deal; a source states it's "worth at least $60M."
- CyActive's architecture relies on both client and cloud-based software; the former inspects client Web traffic and behavior, while the latter analyzes existing malware and uses it predict/stop future threats. Corporate interest in cybersecurity has been growing rapidly following a series of well-publicized breaches, including one at eBay.
- PayPal recently struck a deal to buy white-label mobile payments platform Paydiant, reportedly for $280M. Back in 2008, the company bought Israeli fraud-detection software firm Fraud Sciences for $169M.
Mon, Mar. 2, 12:01 PM
- PayPal (EBAY +0.4%) is acquiring Paydiant, provider of a white-label platform that allows retailers to create their own mobile wallet apps, replete with payment, loyalty card, and digital coupon support. Multiple sources tell Re/code the purchase price is around $280M.
- Paydiant's customer base includes Subway, CapitalOne, and (notably) MCX, a consortium of major retailers that plans to launch a QR-code based mobile payments platform (called CurrentC) later this year. MCX's backers include Wal-Mart, Target, Kmart, Best Buy, Dunkin' Donuts, CVS, and several large gas station chains.
- The deal comes on the heels of the Apple Pay launch, Samsung's acquisition of mobile payments platform LoopPay, and Google's deals with U.S. carriers to pre-install Google Wallet on their Android phones. Google is also rumored to be working on Android Pay, an API for 3rd-party apps that can handle both online and in-store payments.
- Though PayPal handled $45.6B worth of mobile transactions in 2014 (mostly online), the rise of mobile payments and authentication platforms backed by tech/Internet giants has been viewed as a long-term threat. Evercore last November: "[T]he convenience that mobile necessitates means that demand channels, including marketplaces, Search, Social and even the OS, are moving closer to sellers ... The result allows demand channels the opportunity to offer payment elements, including user authentication and stored payment credentials for the user on behalf of the merchant, a role traditionally reserved for payment players, most notably PayPal."
Fri, Feb. 6, 7:16 AM
- Reflecting a lower income tax expense, eBay (NASDAQ:EBAY) has revised its 2014 earnings upward by $87M, after it underestimated the tax benefit of an inter-company transaction that happened in December.
- After adjustment, eBay's net income rose to $1.02B from $936M in the quarter ended Dec. 31.
- Previously: eBay beats by $0.01, but guides light (Jan. 21 2015)
Tue, Feb. 3, 5:58 PM
- Re/code reports EBAY began notifying employees affected by its planned job cuts (set to affect 7% of the workforce) on Monday, and that the group includes PayPal workers who "held sales and product roles in the division that focuses on getting restaurants and small business retail stores to accept PayPal as a payment method."
- The site adds PayPal's in-store initiatives have "largely been viewed as big disappointments inside the company," and speculates the severity of the cuts suggests "PayPal may be looking to refocus on its core Web and in-app payments under CEO-designee Dan Schulman."
- PayPal has rolled out or trialed a smorgasbord of products/services over the last few years that are meant to enable offline/mobile payments. They include Bluetooth beacons, a Square-like credit card reader, offline payment options for the company's core Android/iOS apps, an NFC payment service, and a solution for making payments using a phone # and PIN (Discover is a partner).
- Collectively, the solutions have seen only modest uptake. On the other hand, PayPal's mobile payment volume (largely tied to e-commerce) grew to $45.6B in 2014 (20% of total volume), and was up 58% Y/Y in Q4.
Wed, Jan. 21, 4:42 PM
- Along with its Q4 results, EBAY announces it has reached a standstill agreement with Carl Icahn, whose demand for a PayPal spinoff was satisfied last September. Icahn Capital exec Jonathan Christodoro will be joining eBay's board; Icahn will have the right to decide whether Christodoro serves on eBay or PayPal's board after the spinoff.
- Also joining eBay's board: Former Wellington Management chairman/CEO Perry Traquina, and Frank Years, the chairman of financial advisory firm CamberView Partners. The board now has 15 directors, 13 of whom are declared to be independent.
- Confirming a December WSJ report, eBay says it's cutting 2,400 jobs (~7% of its workforce). The layoffs will cut across Marketplaces, PayPal, and eBay Enterprise, and be carried out in Q1.
- The company is now "exploring strategic options for eBay Enterprise, including a sale or IPO." While declaring Enterprise, which provides various e-commerce services for major online retailers, a "strong business," eBay says it has become clear the unit "has limited synergies" with either Marketplaces or PayPal.
- Enterprise's sales rose 9% Y/Y in Q4 to $443M, accounting for 9% of eBay's revenue.
- EBAY now +3.7% AH. Q4 results/guidance, PR
Wed, Jan. 21, 4:19 PM
- eBay (NASDAQ:EBAY): Q4 EPS of $0.90 beats by $0.01.
- Revenue of $4.92B (+8.6% Y/Y) misses by $10M.
- Expects Q1 revenue of $4.35B-$4.45B and EPS of $0.68-$0.71, below a consensus of $4.7B and $0.76.
- Expects 2015 revenue of $18.6B-$19.1B and EPS of $3.05-$3.15, below a consensus of $19.97B and $3.26.
- Shares -1.2% AH.
- Press Release
Tue, Jan. 20, 5:35 PM
Dec. 12, 2014, 1:44 PM
- Apple's U.S. and U.K. sites now support PayPal (EBAY -1.1%) as a payment option. Internet Retailer ranks Apple as the second-largest online retailer in the U.S., behind Amazon.
- The deal acts as a valuable win for PayPal as the online payments giant, along with its Braintree unit, continues battling against Stripe, Amazon, and other challengers for the support of online merchants selling on sites not named eBay.
- It comes even though Apple has been pitching Apple Pay as a solution for both online and offline payments. Priceline just announced its iOS apps will support Apple Pay-based purchases that are authenticated "with a single touch via Touch ID."
Dec. 10, 2014, 5:52 PM
- EBAY is weighing a plan to "eliminate thousands of jobs early next year," the WSJ reports. One source says the company has talked about slashing at least 3K jobs (~10% of the workforce).
- The cuts would come ahead of a PayPal split set to occur in 2H15. eBay's spending has been exceeding revenue growth in recent quarters: While revenue rose 12% Y/Y in Q3, GAAP opex rose 17%.
- eBay's 33.5K employees are almost evenly split between PayPal and Marketplaces. Marketplaces still generates more revenue ($2.16B vs. $1.95B in Q3), but PayPal has been growing much faster (20% vs. 6%).
Dec. 10, 2014, 11:10 AM
- CEO John Donahoe will likely leave eBay's (EBAY -0.3%) board and join PayPal's board after eBay finishes spinning off PayPal, Re/code reports.
- The site adds Donahoe wants to give Marketplaces chief Devin Wenig "the freedom to run the company as he sees fit without having to answer to his former boss." Wenig is set to become eBay's CEO following the split, and AmEx exec Dan Schulman PayPal's CEO.
- CFO Bob Swan will reportedly join eBay's board if Donahoe leaves.
Dec. 9, 2014, 8:06 AM
- ChannelAdvisor reports holiday-to-date same-store sales are up 20.7% at Amazon (NASDAQ:AMZN).
- The holiday comp at eBay (NASDAQ:EBAY) is +14.7% through December 8.
- The peak for year-over-year sales gains this holiday season came in the third week of November on a new trend of retailers pulling forward some of their best deal which were reserved for Black Friday and Cyber Monday in the past.
- Amazon is down 1.1% premarket, while eBay is unchanged in light early trading.
Dec. 8, 2014, 9:35 AM
- "We envision a $2:$1 risk/reward on a base case and $3:$1 on a bull case based on what we believe are a reasonable set of assumptions and comparable," says Stifel's Scott Devitt, upgrading eBay (EBAY +1.5) to Buy and setting a $65 target.
- Devitt predicts PayPal will gain online payments share following its spinoff (Dan Loeb agrees), and thinks eBay's Marketplaces ops will see margin improvement in 2H15. He sees both PayPal and Marketplaces potentially growing their op. margins post-spinoff.
- The upgrade comes two weeks after Evercore's Ken Sena downgraded to Sell. He cited the ability of "demand channels" to authenticate users on mobile and store payment data without PayPal's help, and the efforts of Apple, Facebook, and other tech giants to do the same.
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