eBay Fourth Quarter 09 Results

[Philip.Cohen]

Hold on, hold on, about another hour or so to go before the commencement of the latest episode in the continuing eBay marketplaces slow-motion train wreck story. It’s going to be fascinating to hear the spin that the eBafia Don will try to put on the continuing disaster of his own making this time.

God, it’s like one of those Saturday afternoon serials at the movies that we—those of us old enough to remember—used to enjoy so much: a never ending series of crises ... What fun! Shame about all the small sellers detrimentally affected.

[bnwt]

EBay Results Beat Street; 2010 Outlook Rosy


http://www.foxbusiness.com/story/markets/industries/technology/ebay-results-beat-street--outlook-rosy/

[Bazza]

Isn't that fantastic news. Even in a market downturn, Donahue delivers.

[Poddy]

Isn't that fantastic news. Even in a market downturn, Donahue delivers.

Yep Bazza 'Fantastic' is the right word as in the true meaning of the word FANTASY 

Here is the compararison graph for eBay compared to NASDAQ and Dow Jones

[tellomon]

Donahue delivers.
     

[Philip.Cohen]

Poddy's graph says it all (where did it come from, Poddy? I’m sure I can find a place for it in one of my ramblings).

So, this quarter there has been a small improvement over the disastrous same period last year. In relative terms, compared to everybody else, eBay is undoubtedly still going backwards, and that is because the current eBay management simply no longer has any understanding of the business it is (was) in. eBay's management’s only current purpose is to try to obfuscate and fiddle matters so that the market analysts, sound asleep board of directors, and shareholders are kept in the dark as long as possible and those executives can realize their own interests before finally putting on their life jackets and taking to the lifeboats.

Time will tell …

Bazza, do we still have a “market downturn”? Probably that is still so for sellers on eBay. But what about the recovering profits of all the other commercial organizations? Again, the graph says it all!

I suspect that if you want to sell anything “for a profit” on eBay these days you have to resort to nominal-start auctions with a liberal dose of own-auction bidding. But that’s quite OK with eBay (that’s why they introduced non-unique masking of bidding IDs); their only requirement is that you don’t be too naïve about how you go about it (take some lessons from “beckertime” and his associates).

[cueperkins]

LOL Phil....Poddy's always been the graph man, from the rebellion and beyond....lol...in fact they used to be a regular feature on the Ebay RT...lol.......he's earned some prize winning sanctions for telling it how it is....lol....he da man !!!

[Bazza]

Comparing a single companys' share price performance to the indexes is like comaparing apples and oranges. Indexes are based on the share price of a wide range of companies. Some will be performing better than ebay, some worse. If you look at the 'trend' of ebays performance. it is closely aligned to the indexes and that is what's important for current shareholders.


For the fourth quarter, the company saw net income of $1.35 billion or $1.02 per share, which compares to year-ago earnings of $367.2 million or 29 cents a share.

'Continuing disaster' I think not

[cueperkins]

eBay’s Turnaround Is in Jeopardy — What Now?

What happens when your turnaround takes an about-face? eBay CEO John Donahoe may find out the answer to that question if he isn’t careful. Although Donahoe has been implementing a lot of changes aimed at driving new business in the company’s core marketplace division, it’s looking like he needs to come up with some additional ways to bring consumers and sellers back to the site.

Next Wednesday, eBay is expected to report its financial results for the last three months of 2009, which includes the holiday season. The results aren’t likely to be as bad as a year ago — when Donahoe had to apologize to investors for a disappointing performance – but also aren’t likely to be as impressive as you’d expect when a turnaround is working. Analysts are looking for an incremental rise in both revenue and profit.

Perhaps eBay’s efforts to repair its business have been too focused on impressing investors. True, eBay’s stock is up 67 percent in the past year. But the company isn’t doing well with either consumers or buyers — who, unlike investors, actually contribute to its revenue. When Piper Jaffray asked consumers last month which site had the best shopping experience, only 13 percent said eBay, down from 27 percent in March 2009. Another 65 percent said Amazon was the best, up from a prior 36 percent.

Amazon is also appealing to eBay’s key customers, the PowerSellers. When JP Morgan surveyed them, 54 percent had a negative opinion of eBay, while 69 percent viewed Amazon positively. Even worse, PowerSellers sold 56 percent of their goods on eBay last year, down from 65 percent in 2008. In short, all that tinkering with eBay’s marketplace isn’t reversing the flow of buyers and sellers from eBay to Amazon.

So what’s it going to take to return an allure to eBay’s site? There aren’t a lot of appealing options. But it could start by reaching out to its most vocal critics. The comments section of many articles and blog posts concerning eBay (including some here) blossom with angry rants from disenchanted, often alienated eBay sellers.

eBay’s stance has long been to dismiss them as a vocal minority, which worked for a while. But the web is a mighty bullhorn amplifying the complaints of the disenchanted — whether you agree with their complaints or not. After a while it taints the brand in the eyes of others, as companies that have set up fire brigades to extinguish complaints on Twitter have learned all too well.

To win back more consumers, eBay can also go head-to-head with Amazon at its own game: heavy discounting. Part of the appeal of the auction-driven commerce that eBay has moved away from was that it held the promise of a bargain price. Now that eBay is pushing the fixed-price format, many consumers don’t see much of a difference between eBay and Amazon — except that Amazon has a stronger image as a trusted clearinghouse for low-priced goods.

Often, many sellers offer the same item on eBay with no difference in their buy-it-now prices. eBay could encourage deeper discounts by placing them higher in search results or in featured listings. The company could also renew its image as a low-cost e-tailer with commercials that are more focused and less baffling that its “IT” campaign.

Of course, going up against Amazon on discounts isn’t easy, as Wal-Mart well knows. And a discount strategy could disappoint the same investors that eBay has been working so hard to impress. But if the company continues to lose market share to Amazon, it will have a bigger problem than irate shareholders. It will have a failed turnaround

http://gigaom.com/2010/01/18/ebays-turnaround-is-in-jeopardy-what-now/

[Philip.Cohen]

Comparing a single companys’ share price performance to the indexes is like comaparing apples and oranges. Indexes are based on the share price of a wide range of companies. Some will be performing better than ebay, some worse. If you look at the ‘trend’ of ebays performance. it is closely aligned to the indexes and that is what’s important for current shareholders. ...

Oh, but indeed you can compare a single company’s performance to the indexes. Indeed, that is precisely what these indexes are for: to measure the performance of individual companies against the average of the basket of companies whose performances are included in such indexes; for every company that is below the index there will be one above the index, and in this case the graph indicates that eBay is well and truly in the below index group.

Bazza, frankly, I am surprised that you would have such a misunderstanding of the purpose of such indexes; frankly, your interpretation of that graph, your “spin” on it, is what I would have expected only from a paid eBay lobbyist.

[Bazza]

Clearly Philip, you have no understanding of sharemarket indicators. The indicies are are based on a share 'price' amalgamation of the share 'price' of a range of companies. No single company will follow the index performance precisely. The ebay share price has a value. If you want to compare that value to the indicies, you look at the market 'trend' in comparison, not the value. It's the trend of the share 'price' that is important, not the value of an individual 'price' compared to the amalgamation of hundreds of share 'prices'.

ebays' performance is clearly, currently in line with the trend of the indicies and the companys' performance in the '09 4th quarter, should be reassuring for shareholders.

[Philip.Cohen]

Bazza, I guess we will have to agree to disagree on how to interpret that chart; your interpretation seems to me to be the interpretation that “Noise” Donahoe and his gaggle of fellow turkeys would put on it; I will rest my case by simply noting the difference between the base point at 2005 and the large “minus” gap that eBay has opened up by 1010.

I have no idea how accurate this graph is with respect to the last quarter of 2009 but, even disregarding that large minus gap, at 2010 one could barely say that eBay was following the trend and, of course, if eBay does not at least match or exceed the trend, then it is in fact still going backwards, and if you look closely at the 2010 end of that graph (if it is accurate) you will indeed see that eBay is falling below the trend, in other words, eBay is still going backwards when compared to the indexes.

Frankly, I would have thought that only an eBay lobbyist could claim that being 60% below the indexes and still (apparently) falling below the trend could be some sort of improvement.

Do say hello to “Noise” for me when you speak to him next.

[Bazza]

Philip. I would suggest that you look at the date that the 'gap' in ebays performance in comparison to the indicies 'opened up'. Then compare that to the date that Donahue took the helm (March 2008). The share price drop 5 years ago has no bearing on todays performance. Other than Donahue keeping the ebay ship, well and truly above water.

Have a look at some more up to date graphs, if graphs are your thing.

[cueperkins]

Why not post the 'up-to-date' graphs here?......and Poddy's the one with a thing for graphs.....please proceed though, the debate is interesting....

[Poddy]

Just for you Bazza  



Up to date graph, hot off the press the last 3 months eBay compared to Amazon

On close inspection eBay gained ZIP, ZILTCH, NOTHING, SFA but now have a look at Amazon for the same period.

Donahue delivers alright, what he delivered was more hot air, hogwash and bovine excrement.

Onya 'Noise'

Bazza you remind me of some one, I just cant quite put my finger on it yet but keep posting, it will come to me

[*Brum6y*]

I was looking at the 5-year graph and noticed one little thing in the last half of 2009....

Ebay was flat. The NASDAQ and DOW pulled up 20%.

For the 3 years prior, they all tracked very similarly - except eBay didn't fall as much around Oct 2008 as the indices. But I suppose when you're already 60+% down on the indicies from your 2005 start point, you're that much closer to the bottom and there's not as far to fall.

[cueperkins]

Lol.....I can't just lurk...have to occasionally rally for further debate....

....These graphs are a bit like statistics aren't they...you can read whatever you like into them, but even with the power of one....the truth is STILL the truth in the scheme of things...the thing is that it's many more than just the power of one raising their voices against Ebay...huh ?

vocal minority huh?......that same vocal minority slew goliath in the ACCC debate..and bloody proud we all should be.....fetch the slingshot....lol

[tellomon]

   

[cueperkins]

LOL...bring it on ya buckaneers !!!  They're on ya buckin head.....lol

[*Yibida*]

Cupie....Sometimes I do wonder if we did win ?.... or inadvertently helped ebay stay afloat ?.... by getting our way and had other payment types reinstated most sellers stayed with ebay.... if we'd lost the fight and ebay had a paypal only system.... I think they would have lost so many more members that the walls may have crumbled to the point of the board stepping in and sacking Mr Noise ?.....  

[tellomon]

Fancy seeing you here, Yib!

[*Yibida*]

I Lurk a lot bro....

[cueperkins]

Na yib...the EFT industry itself would never have let it happen mate...it wasn't just consumers who made a louder Noise than Donohoe in his lab experiment in Australia....bloody hide of him...lol...

The ACCC issue was motivated by the constraint of competition in the EFT MARKETPLACE...not the online auction/bin marketplace (a battle that remains to be fought in terms of anti-competitive conduct).......the big shakers and movers in the EFT marketplace were against it and they all made submissions including Google and Paymate...irrespective of consumer sentiment, I believe that the numerous submissions from the Bankers Assoc...ASIC, RBA, C/wealth Bank, Paymate, Google and the like, and various other bodies were not going to be ignored....what a hide locking out every other payment method?...IT IS ANTICOMPETITIVE to the ducks guts (no offense fluffy).....So, the consumer element and submissions which numbered in the hundreds only served to support the concept that Paypal only was anticompetitive in that framework also.....but as I said, the misuse of market power over online sellers backed up by a one sided contract that limits competition is another battle to be fought....by the sellers...wonder how much longer it will take them all to wake up?

[tellomon]

I Lurk a lot bro....

Not when ya post ya don't!

[*Yibida*]

Dis is a serious subject dude... show me that frown cutie....

[Poddy]

Here you go Philip the link to financial info

http://finance.yahoo.com/q?s=ebay

Enjoy

[Bazza]

You know. this only happens on this site (and I post on quite a few forums). Whenever someone disagrees with you here, they must be someone else??? So far I've been bobby's nemisis, trolling him from another forum, I've been (and apparently still am) an ebay employee and now I'm someone poddy used to spar with??? Wrong, wrong & wrong.

Can't you just stick to the subject?

Anyway, poddy, there is no denying that ebays stock performance has improved over the last year. How about you post a graph of that. Amazon vs ebay has nothing to do with ebays 4th quarter performance.
I don't think Philip will be able to use that link you posted. The results are far too positive

[*Brum6y*]

On a day-to-day basis the answer to the question "How much is a share worth" the answer is "as much as you can sell it for".

The true value - as the representation of a portion of the company's worth - is almost incidental.


As for the arguments about performance, dividends, etc. the determination of the basis of comparison is more of a battle ground than the numbers debated...

3 year trend? 10 year trend? Year over year results? Dividends? Performance against Indices? Performance against rivals? ... and even agreeing who the rivals are for valid comparison..!

Pick the right reference points and the choice of graphs - and the old adage: "Lies, damn lies and statistics" takes wings for another trip around the world...

[Philip.Cohen]

As far as the ACCC is concerned, they are useless; if not for the overwhelming response from eBay users, nothing would have happened; and even then eBay managed to work around the issue by still requiring PayPal to be offered and placing PayPal in the default payment position.

eBay thinks that it is a law unto itself and the laws that apply to we simple consumers don’t apply to them. They are a most amoral, unethical, unscrupulous, indeed criminal, organisation in my opinion; I look forward to the day when some competent authority shines a strong light under this rock.

Edited

[Philip.Cohen]

“Turkey” Donahoe has been able to improve the eBay stock price from its previous disastrous low of $11 (which he caused) only by raising fees, cutting staff, and taking all sorts of other desperate actions to maintain profits. 

The fact is this business is, relatively speaking, still going down the toilet. Market analysts do little more that regurgitate eBay’s deceptive press release spin, and the unsuspecting stockholders are simply taken along for the bumpy ride.

You paid eBay stooges, stop kidding yourselves. You should seriously consider seeking another employer, or at least keep your life jackets on permanently.

By the way, when is eBay going to repatriate some of that overseas cash and pay its stockholders a dividend?

[Bazza]

So now I'm 4 people am I Philip? That's a hell of an imagination you've got there.

How do you get so tainted against ebay that you will not accept that investor confidence, since Donahue took over, has improved?

The fact is this business is, relatively speaking, still going down the toilet.

Based on?

Or is it simply because you don't like ebay?

You started this thread in the hope of a poor result. Wrong again.

[Philip.Cohen]

I thought I explained that in my previous post, Bazza. Try reading it again, more slowly.

[*CountessA*]

Different perspectives... different perceptions.

I must admit my main concern with eBay is that there is a continuing process of putting particular types of sellers at risk and making things more difficult for many buyers. The shareholder issue is something I leave for those who have shares in eBay; I would personally not invest any of my money in eBay, but each to his own.

Perhaps those who are stockholders can report on whether they are happy with the performance of their dividends during the last three years.

For your interest, I include some trading information below for Amazon:

Stock Price History
Beta:   1.15
52-Week Change3:   153.54%
S&P500 52-Week Change3:   30.50%
52-Week High (03-Dec-09)3:   145.91
52-Week Low (27-Jan-09)3:   47.72
50-Day Moving Average3:   132.79
200-Day Moving Average3:   105.89
Share Statistics
Average Volume (3 month)3:   10,668,900
Average Volume (10 day)3:   10,211,000
Shares Outstanding5:   432.98M
Float:   332.18M
% Held by Insiders1:   27.69%
% Held by Institutions1:   64.20%
Shares Short (as of 31-Dec-09)3:   12.90M
Short Ratio (as of 31-Dec-09)3:   1.4
Short % of Float (as of 31-Dec-09)3:   4.60%
Shares Short (prior month)3:   13.68M
Dividends & Splits
Forward Annual Dividend Rate4:   N/A
Forward Annual Dividend Yield4:   N/A
Trailing Annual Dividend Rate3:   N/A
Trailing Annual Dividend Yield3:   NaN%
5 Year Average Dividend Yield4:   N/A
Payout Ratio4:   N/A
Dividend Date3:   N/A
Ex-Dividend Date4:   N/A
Last Split Factor (new per old)2:   2:1
Last Split Date3:   02-Sep-99

And for eBay:

Stock Price History
Beta:   1.74
52-Week Change3:   106.77%
S&P500 52-Week Change3:   30.50%
52-Week High (21-Oct-09)3:   25.80
52-Week Low (06-Mar-09)3:   9.91
50-Day Moving Average3:   23.23
200-Day Moving Average3:   22.58
Share Statistics
Average Volume (3 month)3:   15,981,400
Average Volume (10 day)3:   24,859,600
Shares Outstanding5:   1.29B
Float:   1.12B
% Held by Insiders1:   13.75%
% Held by Institutions1:   75.80%
Shares Short (as of 31-Dec-09)3:   28.28M
Short Ratio (as of 31-Dec-09)3:   2.2
Short % of Float (as of 31-Dec-09)3:   2.50%
Shares Short (prior month)3:   26.38M
Dividends & Splits
Forward Annual Dividend Rate4:   N/A
Forward Annual Dividend Yield4:   N/A
Trailing Annual Dividend Rate3:   N/A
Trailing Annual Dividend Yield3:   NaN%
5 Year Average Dividend Yield4:   N/A
Payout Ratio4:   N/A
Dividend Date3:   N/A
Ex-Dividend Date4:   N/A
Last Split Factor (new per old)2:   2:1
Last Split Date3:   17-Feb-05

[*Brum6y*]

Like I said earlier, choosing your reference points can support a variety of conclusions...

From the article cited earlier in this thread:

For the fourth quarter, the company saw net income of $1.35 billion or $1.02 per share, which compares to year-ago earnings of $367.2 million or 29 cents a share. Adjusted earnings per share increased to 44 cents, compared to year-ago adjusted earnings of 41 cents a share.

Year ago...

Here we go:



Well, will you look at that... Impressive, isn't it!!!

Well before we pop the champagne corks, lets look at it for the last TWO years:



Hmmm... better pack the champagne away... it would seem that eBay's performance in the last year still hasn't recovered fully from its performance of the year before.

Looking at that chart, it would seem investors were hopeful with Donahoe at the helm, with a substantial jump (roughly 20%) in April, 2008.  But then we see a slide that outdoes the NASDAQ and even the All Ords. In the following 8 months, eBay shares fall through a 70% change where the rest of the market (as represented by the indices) take around a 45% dive.  Is this what they mean by outperforming the market?

But to be fair, starting from two years ago, eBay is now back in line with where it would have been in the normal course of 'following market trends'

But wait a minute.... what was that I saw on Poddy's 5 year graph?

Let's see:



That's right - eBay have been following the trends of the market ... but at a level 40% under their 2005 starting point.  Maybe we should look a little further back....

They say a picture's worth a thousand words, but since we're talking shares I'll use a graph instead - and to introduce it, I'll take an excerpt from an article announcing Whitman's stepping down:

Replacing her is John Donahoe, head of eBay Marketplaces, whom Whitman recruited in 2005.

I know... it's just a coincidence......

[Bazza]

Brum6y you should have stopped at the first graph in your post. '09 4th quarter, is of course the topic of this thread. Time will tell, if the current trend lasts, as with all public companies but it can't be argued that investor confidence is riding high. Keep in mind that the share price is an indicator of the companys current worth, not it's value as against other companies.

[Poddy]

This is a graph of the 4th quater, just disregard the Amazon portion and loomk at ebay
in the 4th quater there was no upswing at all

[Bazza]

poddy, 4th quarter results are about profitability during that period, not where the share price is currently valued. The results for that quarter have only just been released and the result was excellent.

[Poddy]

I note with interest that on the 21st Jan (the day of 4th quater report) there were 6,583,100 shares changed hands and since then the share price has been dropping at a constant and steady rate.
it dropped $1.00 in one day of trading.

Interesting dont you think?

Its the same thing at each quarterly report time, wonder why that is?

[Roo]

I think it's called...'Cooking the books' Poddy!

[Bazza]

poddy, share trading is the exchange of wealth from the impatient to the patient.

[*Brum6y*]

I have a more pragmatic approach to results....

Quarterly reporting gives an overview of a company's progress four times a year - providing an analysis of various financial elements that require a process that examines many factors not immediately as visible, nor as straightforward as share price.

Looking at a single quarter and blowing trumpets (or horns of doom) is just a blinkered approach.  It's the sort of thing politicians, the media or those in awkward positions will brandish with a flourish, fanfare and fanaticism that will paint a rosy picture to all who just listen to the carnival music and believe what's said, rather than examine the detail and find out what is NOT said.

If I were to be an investor in such a company, I would start with no less than 5 years of such 'quarterly' reporting since the individual results are only a part of what is important.

If I were investing for retirement income, I would want to see the dividends - over time - so I could assess the risk, severity and impact of the times of feast and famine.

If I were investing for capital growth, I would like to see those backbone figures so I could judge the volatility and future prospects.  Again, a single set of figures isn't going to give me much of a feel.

Profitability is just one measure - but even the patient will need to know if it is abnormal, sustainable or otherwise ... and that takes historical results.


In truth, I am not overly surprised that the results are reasonable and from my naive thinking, I would put the next two quarters (possibly) up for the basket of roses award.  This is not because I am thinking eBay is heading in the right direction at all - but the natural result from the actions Donahoe has taken to capitalise on short term gains.  Whilst the seller community hangs in, there will be more opportunity for these short term gains to continue - but as the screws get tightened more and more, sellers will take action to protect their businesses.

There are already sellers who have implemented solutions on their own web sites and others who are in the process of doing so - which will take more of the buying public away from eBay.  Perhaps not removing eBay from their lives altogether, but at least from exposure to other sellers in a particular product line.

Now this is serious business that eBay will lose - good sellers looking after good buyers equates to good money, no hassle money, that eBay is simply alienating.

It is my belief that this emigration will build as those sellers who were 'gunna do something' have had the time to work out what and now see it is time to act.

I'll be particularly interested in the Q3 and Q4 results for this year....

poddy, share trading is the exchange of wealth from the impatient to the patient.

The patient could be those who 'cash out' now and bide their time to buy back in when the share price drops again, couldn't they?

[Bazza]

brum6y, the patient are more likely those who bought below $10 early last year and have now more than doubled their investment, should they choose to sell. The impatient sold their wealth to them

I agree with most of your points brum6y, however, trading history has very little to do with current market dynamics. Management history is far more influencial when judging the likelyhood of company growth. No risk analysis based on history will help predict future values. Smart investors look ahead at the long term viability of a company and it's management. Markets don't trend on history, they trend on perceived future results.

[*Brum6y*]

Predicting future values is more crystal ball than science and I won't go into any specifics about criteria I use to assess potential - other than you have to know the business your company is in, otherwise you may as well play 'pin the tail on the donkey'.

One of the biggest parts of my evaluation is risk assessment and - from my own experience - I have found historicals useful in highlighting points around which questions arise regarding the resiliency or susceptibility of a company to influences through internal (eg management) and external (represented by the NASDAQ - and others) factors.

This doesn't necessarily give me my retirement income figures - but it helps me answer questions like: "If the shite hits the fan, do I want Donahoe at the helm with my treasure chest on board...?"

[*Brum6y*]

But all this dancing around is just a lot of huff and puff.

I've said why I'm not overly surprised at these results and I've stuck my neck out for Q3 and Q4 trends and I'l be interested in how things track in the meantime.


Now excuse me while I polish up the crystal ball to see if I'll be buying that 45' cruiser for myself for Christmas...

[Philip.Cohen]

Unfortunately Brumby, Bazza did not understand a word you said as he has been preprogrammed only to regurgitate the eBay view of things. You may as well debate the matter with "Noise" Donahoe or one of his fellow turkeys, you'd get like responses ...

[Bazza]

My goodness Philip. There we go with the insults again.

Please, what was it you were going to say about the 4th quarter results?

[Philip.Cohen]

Highlights of Amazon's Q4 Blow Out
http://seekingalpha.com/article/185375-highlights-of-amazon-s-q4-blow-out?source=email

Oh, dear me, what have all the eBay supporters got to say now?

How does Amazon do it? They have no idiots like “Turkey” Donahoe handicapping them, that how!

I notice that an eBay director has also been dumping eBay shares. She must know something we don’t know, or maybe she saw Amazon’s Q4-09 results and now realizes that eBay, with “Noise” Donahoe at the helm, is indeed “dead man walking”.

The full sad, ugly, gory details of Donahoe’s criminal incompetence still at
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6502877