dlweld

Three Value Stocks That Appear Ridiculously Cheap

A couple of things on the valuation of EBAY. Seems they have 7 billion for goodwill on the books - seems a bit tenuous, why not 8 billion, or 6 billion, I mean what's a billion here or there? I suppose that all refers to name recognition, and how people feel when they think of EBAy, but out there in the real world, EBAY has unfortunately built up quite a large "badwill" amount. How does that sit on the books? I'd rate goodwill as close to zero now - making the company worth about 4 billion total.

A good example of how following the usual ratios and figures can be misleading. A "walking around" type analysis - what's actually happening on the ground - can't be beat. In Ebay's case there are lots of astute observations from the front, usually from long time sellers who are saddened and disappointed that EBAY has developed to such a point as to be almost unusable by them. With these sellers' departure, many of the cool and expensive items go, the eyeballs go, the advertising revenue goes - and well, the company follows. Sure, there's still lots of cash in the till and lots of (tacky) items for sale but the trend is strongly downward. There's been such a negative branding developed, that even if top management did the right thing - and quit - Ebay will be a long time coming back to what it was. Sad.