EBAY

eBay Inc

TMT, Consumer


Presented:07/14/2020
Price:$59.08
Cap:$41.51B
Current Price:$66.99
Cap:$32.76B

Presented

Date07/14/2020
Price$59.08
Market Cap$41.51B
Ent Value$27.52B
P/E Ratio9.81x
Book Value$5.94
Div Yield1.02%
Shares O/S702.68M
Ave Daily Vol12,511,250
Short Int2.97%

Current

Price$66.99
Market Cap$32.76B
eBay, Inc. operates as a commerce company, which engages in the provision of investments and acquisitions to help enable commerce on platforms for buyers and sellers online or on mobile devices. It operates throught the following platforms: Marketplace, Classifieds and StubHub. The Marketplace platform include online marketplace located at www.ebay.com, its localized counterparts and the eBay mobile apps. The Classified platform focuses in collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. The StubHub platform gives online ticket platform located at www.stubhub.com, its localized counterparts and the StubHub mobile apps. The company was founded by Pierre M. Omidyar in September 1995 and is headquartered in San Jose, CA.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), eBay Inc (EBAY), Etsy Inc (ETSY), Walmart Inc (WMT), Wayfair Inc (W) 

Highlights

The presenter sees a favorable risk/reward setup for bears with shares of eBay (EBAY) hovering in the high $50s due to optimism surrounding 1) new CEO Jamie Iannone (former Walmart), 2) two activists - Starboard and Elliott successfully pushing for change (i.e., the recent sale of StubHub and potential sale of the Classifieds business at high multiples), and 3) the outlook for the GMV growth in the wake of the pandemic. However, the presenter thinks the stock’s current price reflects the best-case scenario and ignores some key issues. In his opinion, the EBAY platform has structural issues and competitive dynamics will weigh on growth. Further, he views the stub, post the sales of the Classifieds business and assuming a normalization to pre-COVID LSD% GMV declines, as more accurately valued at 6-7x EBITDA, not 10x, which pencils out to a 30-45% gain on the short position.

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Idea Discussion

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