Biz Break: eBay shines after results; smartwatch sales retreat

Top Of The Order:  

It’s An eBay Kind Of Day: Remember eBay, everyone? The company that, it could be argued, invented the whole consumer e-commerce industry? Yeah, that eBay.

Well, with Amazon being Amazon, Apple still a juggernaut, social media playing a bigger role in people’s lives every day, and the on-demand service economy led by the likes of Uber and Lyft, it may have been easy to put eBay in the rearview mirror. It’s there, but you don’t really think of it that much any more.

That would be a mistake.

On Thursday, eBay’s shares reached an all-time high of $30.31 before closing with a gain of almost 11 percent at $29.93 in the wake of the company reporting better-than-expected second-quarter results. Late Wednesday, eBay posted a profit of 43 cents a share on revenue of $2.2 billion, which topped the estimates of 42 cents a share and $2.17 billion in sales that came from analysts surveyed by Thomson Reuters. EBay also raised its outlook for the year, and now expects to earn between $1.85 and $1.90 a share, with revenue in a range of $8.85 billion to $8.95 billion.

So, what gives?

It’s been about a year since eBay spun off PayPal, which drove much of eBay’s earnings for several years. The company is now on its own, and it’s working to make its merchant business more competitive in the e-commerce market. Some industry analysts believe eBay is headed in the right direction.

“There continues to be a 12-to-24-month road ahead of investing in growth,” said UBS analyst Eric Sheridan in a research report. “We continue to believe that eBay provides a number of paths to value creation.”

Those paths, however, are going to have to make the online shopping experience something that keeps bringing customers back to eBay, which, despite the company’s upbeat outlook, is no guarantee.

“EBay is showing signs of improvement in its core merchant business,” said Neil Doshi, of Mizuho Securities. “But it continues to post growth well below the overall industry and it could take time before the company returns to e-commerce growth rates.”

Middle Innings:

Smart And…Slowing Down: Have you gotten a smartwatch yet? According to data from technology research firm IDC, if you did buy one, there’s a good chance it wasn’t in the second quarter of this year.

IDC said Thursday that during those three months, worldwide smartwatch sales fell by 32 percent from a year ago, the first time such sales declined on a year-over-year basis. Worldwide smartphone vendors shipped 3.5 million devices in the months of April, May and June, down from 5.1 million in the same period last year.

Apple was the top smartwatch seller, with 1.6 million Apple Watches sold during the quarter, which was good enough for 47 percent of the smartwatch market. However, Apple’s sales also fell by 55 percent from a year ago, and it was the only one of the top five smartwatch vendors to see sales drop from last year’s second quarter. IDC said one of the issues affecting Apple Watch sales is that the first Apple Watch that came out a year ago “is in many ways the same product offered in the most recent quarter with price reductions.”

IDC also said that what’s going to determine the success of the smartwatch market going forward will be how much traditional watchmakers get into the industry and how it continues to evolve.

“An increasing number of applications all point to a smartwatch market that will be constantly changing,” said IDC analyst Ramon Llamas. “These will appeal to a broader market, ultimately leading to a growing market.”

Bottom Of The Lineup:

Here’s a look at how some leading Silicon Valley stocks did Thursday…

Movin’ On Up: In addition to eBay, gains came from Extreme Networks, Genomic Health, GoPro, Super Micro Computer and Ultratech.

In The Red: Decliners included Sigma Designs, Proofpoint, Intel, 8×8 and Gigamon.

The tech-focused Nasdaq Composite Index gave up 0.3 percent to close at 5,073.

The blue chip Dow Jones Industrial Average was trimmed by 0.4 percent to end the day at 18,517.

And the broad-based Standard & Poor’s 500 Index gave up 0.4 percent to finish at 2,165.

Quote Of The Day: “I thought our chances of success were so low that I didn’t want to risk anyone’s funds in the beginning but my own.” — Tesla CEO Elon Musk, in his “Master Plan, Part Deux,” which he made public late Wednesday and, let’s be honest, really should be called “Master Plan 2: Electric Boogaloo.”

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Photo: EBay logo (Bay Area News Group Archives)

 

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  • eBay?—LOL …

    “There are a lot of questions out there and I don’t have any of the answers,”—eBay CEO Devin Wenig, Goldman Sachs Technology And Internet Conference, 10 Feb. 2016.

    Fortunately, it’s otherwise always been easy to tell when an eBay spokesperson is being disingenuous—their lips are moving …

    And, notwithstanding the constant stream of disingenuous and delusional nonsense that flows from eBay/PayPal, the share price history of these two clunky operators demonstrates the reality:

    Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
    Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
    Jul 2015 (post-split): EBAY ~$28; PYPL ~$37; AMZN ~$530;
    Recently: EBAY ~$30; PYPL ~$37; AMZN ~$744—LOL …

    PayPal is still standing still, and eBay has for years been effectively going backwards—at a steady rate of knots.

    Notwithstanding the “spin-off” of PayPal from eBay, eBay and “PreyPal” remain effectively joined at the hip—for at least the next five years—and anyone that thinks otherwise is simply uninformed; and, thanks to a continuation of most of the destructive policies introduced over the eight year reign (2007–2015) of the “Pain from Bain”, John Joseph Donahoe II, the eBay marketplace is continuing on its slow journey down the toilet; nevertheless, during Johnny Ho’s occupation of the eBay corner office, this cretin and his gang of hand-picked Keystone Kops still managed to obtain for themselves massive, unearned, “performance” bonuses—while the company’s shareholders received not one penny.

    PayPal’s one-time adoptive parent, eBay, is likely the most unscrupulous commercial entity operating on this planet; but, have no fear, eBay is an equal-opportunity fraudster; demonstrably, they will knowingly aid and abet the defrauding of buyers by unscrupulous eBay merchants who bid on their own auctions, and, conversely, of honest sellers by unscrupulous buyers—as long as there is a financial benefit in such fraud for eBay.

    eBay’s auction format has been atrophying ever since 2008 when the cretinous Johnny Ho further anonymized bidder IDs to better hide, and further aid and abet, demonstrably rampant shill bidding fraud on consumers by unscrupulous sellers. As time has passed, fewer and fewer people remain naïve enough to still believe that, contrary to its claims, eBay has ever had any intention of protecting consumers from such rampant auction fraud—from which eBay profits. eBay is not concerned about “fraud” unless it directly impacts eBay; eBay has only ever been interested in their FVF, regardless of whether or not the transaction is a fraudulent one. And, a few years ago, eBay raised their final valuation fee (FVF) to 10%, and also removed the fee tiers that moderated the fee paid on higher value items. And so, eBay as a whole has likewise, and deservedly, continued to atrophy.

    In early January eBay invited consumers to auction their unwanted Xmas gifts on eBay. And, if you didn’t know what your unwanted gift may be worth, eBay’s advice was to start the auction at 99c and watch the fun—as your item likely sold for 99c—always presuming you weren’t bidding on the auction yourself (and assuming that you or anyone else was able to find the listing in eBay’s manipulated search), in which case you would likely finish up buying it yourself; but that’s OK with eBay too; they don’t mind whether the sale is real or faux, as long as they get their final valuation fee.

    And now, “Having a rough day? Users with similar health profiles to yours typically feel better after purchasing product A, which is available nearby”—eBay Patent App. Additionally, eBay has patented a system to stop the spread of diseases—LOL

    The eBay executive suite—where the incompetent mingle with the disingenuous, the unscrupulous, the malevolent, the outright criminal, and the just plain stupid. …

    For a detailed analysis of the ugly reality of eBay’s demonstrable, calculated, facilitation of endemic shill bidding fraud on consumers on its auctions marketplace, Google “Shill Bidding on eBay: Case Study #5”

 
 
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