With more than half of the world's Internet users coming from developing markets, eBay has ample cross-border transaction growth opportunities.
Although management has been quick to downplay eBay as a takeover target, we believe there are potential consolidation or asset sale partners (Google, Alibaba, Microsoft, Etsy, as well as a host of smaller technology firms) that could strengthen its respective network effect.
EBay's capital-allocation strategies (including a $3 share repurchase authorization and the capacity for a dividend) could augment shareholders' total returns. Read more
EBay is still feeling the effects of the May 2014 data breach/password reset issues and changes in Google's search engine algorithm, which could increase user acquisition costs, deter new sellers, and disrupt its network effect.
Although eBay's unique product selection is a competitive advantage, we expect many small and midsize sellers will gravitate toward players with enhanced fulfillment capabilities like Amazon.
EBay also faces competition from Google, Alibaba, Etsy, and others that offer emergent marketplaces, online services, and comparison shopping sites. Read more
We have assigned eBay a Standard equity stewardship rating after the PayPal spin-off. While we believe that Devin Wenig, who had been the president of eBay Marketplaces since September 2011, is a natural fit as the CEO of a stand-alone eBay and should Read more
For the first time since 2002, eBay is a stand-alone company after the separation of PayPal in July 2015. With almost $83 billion in gross merchandise volume in 2014, eBay's Read more