Hot Tech stock to watch: eBay Inc (NASDAQ: EBAY)

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eBay Inc (NASDAQ: EBAY) stock rose over 2.8% on 18th July, 2019 (As of 11:50 am GMT-4; Source: Google finance) after the company’s net income from continuing operations fell to $403 million from $638 million, a year earlier.

The company has struggled to contend with much-bigger rival Amazon.com Inc., pushing it to introduce new features for sellers and buyers and alter its image away from being an auction site. The total value of goods sold on its site has been falling, dropping another 4% in the quarter to $22.6 billion. Further, eBay is undergoing an internal review of its assets, including a possible sale or spinoff of its online ticket platform StubHub and its classifieds business.

EBAY in the second quarter of FY 19 has reported the adjusted earnings per share of 68 cents, beating the analysts’ estimates for the adjusted earnings per share of 62 cents. The company had reported the adjusted revenue of $2.69 billion in the second quarter of FY 19, beating the analysts’ estimates for revenue of $2.68 billion.

Meanwhile, EBAY is investing in Vijay Shekhar Sharma-led Paytm Mall to acquire a stake of about 5.5%. The companies didn’t disclose the amount eBay is investing but multiple media reports pegged it around $150-165 million (between Rs 1,032.23 crore to Rs 1,135.45 crore at current exchange rates). eBay’s investment comes a little more than a year after it sold its stake in Indian online retailer Flipkart to US-based Walmart Inc. Paytm Mall, operated by Delhi-based Paytm E-commerce Pvt. Ltd, counts Japanese Internet conglomerate SoftBank and Chinese e-commerce behemoth Alibaba among its existing investor. The company had raised around $446 million (around Rs 2,892.5 crore then) from SoftBank and Alibaba last year.

EBay also said it sold its flash-sale site in Germany called brands4friends, without naming the buyer or citing any other details about the transaction. The company bought the business in 2010 for about $200 million in cash.

As eBay’s growth has slowed, the company has sought profits from its advertising business and improve its payments system. The marketplace recently shut down its third-party ad network that let merchants advertise on other sites in an effort to focus on promoted listings on its own site. EBay said growth in promoted listings has helped stabilize its revenue as the value of goods sold has dropped. During the second quarter, about 940,000 sellers used eBay’s promoted listings, resulting in its revenue in that area more than doubling to $89 million.

EBay projects revenue to be between $2.61 billion and $2.66 billion for the current quarter and earnings to be between 62 cents a share and 65 cents.

The company has paid $120 million in dividends during the quarter. The company plans to spend $5.5 billion on share buybacks and dividends this year.

 

 

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