Tony P.

eBay Watch: True P/E Ratio, Listings Update, Business/Casual Seller Mix

"In other words, the risks of being caught out by revenue that doesn't correspond with listings completely outweight the benefits of any intra-quarter misrepresentation."


That statement would be true if there was an actual correlation between listing numbers and revenue, but there is no direct relationship between the two indices.

To illustrate, 1000 listings that end as sold (converted) will provide ebay with a revenue equal to $190, or it could provide $22,000 or more. It all depends upon the starting price and the ending price. This also illustrates just how truly meaningless the listing count numbers convey.

If ebay had 1-Million DVD listings that start at $0.99 and end at that price, the revenue produced would be $190,000. If, on the other hand, they were listings for high-quality goods started at $79 and all sold at that price, the revenue would be over $6,000,000. That is a difference in revenue-generation by a factor of 32. This also illustrates the concept of Quality versus Quantity.

Let's say that ebay has only one listing for an entire month and it is for all of the Trump holdings. The starting price is $12-Billion, and it sells! The revenue from that one sale ($180-B) would look very good, but would the fact that ebay shows a listing number of ONLY 1 cause the Analysts to jump from windows?

The recent glitch/test placed Shopping.Com listings on the ebay auction site, from the last few days of February to the first of March. Depending on which ebay spokesperson' statement you believe, it was either a glitch or a test. (it was a test - watch for it). That placed upwards of 2 million 'extra' listings on the site.