EBAY finally topped?

Discussion in 'Trading' started by Lobster, May 20, 2004.

  1. Most of you are probably only casual eBAy users at best. I use it a little more, that's why I got this piece of "inside information": They have just forced upon their users a completely redesigned "My eBay" page, whose obvious purpose is to make selling on eBay so difficult that sellers will have no choice but to purchase value-added services to make selling easier.

    I am almost certain this will be the straw that breaks the camel's back: eBay is going down.

    My question is to the more experienced among you: How long can we expect it to take for the stock to start collapsing?

    This is the deal: Starting today, eBay sellers are either reduced to about 15% of the speed they are used to, or they give up on eBay completely. If eBay breaks with its tradition of not listening to customers and actually decides to undo this change, all bets are off. But if they go through with it, they will lose lots of sellers, especially the high-volume ones that simply don't have the time to weed through the new interface or the money to hire 5 employees to help them with it.

    How long until the stock reflects this?

    The only thing I can compare this to is google: The owners must have known at least since February 2004 that their business was going down dramatically, yet it is now late May, and everybody is still eager to get in on their IPO.

    This probably means that eBay can continue to go up for another 3 months, 6 months, 9 months? How long?
  2. taodr


    It might take quite a while. Don't forget there are now thousands who depend on Ebay for a living so they will have to adjust.
  3. gaj


    lobster - don't forget, ebay (the company) has ignored lots of its users requests, lied to them, and the stock still acts strong.

    remember the billpoint fiasco? 'customer service' jerry belittling paypal, and how everyone would run to billpoint? oops.

    however, your point is well-taken; ebay makes gobs of money off the initial listing fee, and yahoo lost their chance (when the billpoint debacle occurred) to woo LOTS of ebay sellers. they went en-masse to yahoo, saying "we can get lots o' sellers to you, just work on getting people to look at the auctions"...and yahoo blew their chance, and raised the rates at the same time!
  4. Where else can small-time sellers go for a pool of consumers like Ebay's?

    It sucks, but Ebay's profits should only increase and the sellers can't even pass off the increased costs to consumers.
  5. You make a very valid point, but on the internet, developments can happen quickly. I still remember how I started using google when Yahoo was down for several minutes in early 2000. Back then, nobody would have thought google would one day dwarf all other search engines.

    Anyway, I know it's pure speculation, but it just feels to me like the time is ripe now for one of the other auction sites (maybe even a complete newcomer) to take over, starting with the "small-time sellers" you mentioned. Between eBay and PayPal fees, it is already very difficult to make a profit. All that is needed now is a series of TV or magazine ads, along the lines of "eBay getting to expensive? Try epier.com!" and anything could happen.
  6. Digs


    If the economy crashed, ebay and other pawn (not porn, but that does well in bad times too) type selling business will boom....

    As people will look for the best way to sell things...to generate cash...

    So EBAY has the best chance of all retail type stocks to go thru the roof based on sound fundamentals, in the future...
  7. Mecro


    Very good points.

    I remember discussing some of these problems back in September. Ebay has certainly taken the step toward taking advantages of the same users that made the company what it is today.

    It could be a sign that they are so solid financially and are so in control that they can basically start exhibiting monopoly behavior. Which is fine for anyone holding this stock for real cash income (dividends) but not good for growth prospects being that disgruntled users will be open to alternatives.

    I personally have been using Ebay less and less. Occasionally I will sell smth used. I used to sell used PS2 games and buy new ones and then sell again but lately I have been going to Gamespot and doing the same.

    I think the biggest mistake Ebay made was to approach big business resellers like Gamespot, Sears, etc... and entice them to sell on Ebay. First of all, that killed the pricing power that the small business sellers used to have as wholesalers raised wholesale prices to the level where Ebay prices = retail store prices. Second of all, approaching big companies to post on Ebay makes no sense. If you just take a look at Gamespot's posting, they match if not beat all other sellers and all refer the buyer to the Gamespot site. So what's the point of even using Ebay in those cases?

    I think Ebay has topped as well. A great stock, but not at the current price. A short play is worth the risk, but bottom picking it for dividends is what I would look for from an investment point of view. From a trading perspective, maybe it's time for another puts play with Ebay.
  8. Osman


    the stock has had an amazing run with nary a correction, maybe this precipitates one?
  9. Everest


    I remember a company called Xerox..........

    I agree with the neg comments re e bay, and would add that I too use it less and less since evrything is all 'buy it now' at stupid prices which suggests it is morphing into a plain retail site.

    as for selling the stock - the only way is to wait until the break, then sell the rallies. Pick tops, and, well,................
  10. taodr


    Lobster, once I asked Seagate who was a very good trader about shorting EBAY and he advised against it. The fasination with EBAY is still overwhelming and probably the energy should be applied to a more vulnerable company. I have interest in the art and antique fields and always see that the average Joe is getting fleeced by EBAY sellers much more than people realize or are willing to admit. My postman who sells electronics over EBAY ( and does very well), told me 3 weeks ago the a Russian mob was intervening between him and buyers and stealing their info.
    #10     May 21, 2004