How Low Can You Go?

Picture courtesy of Shah King of Limbo

I am NOT a stock market analyst. I had shares in eBay which I bought mid January 2001. I bought them for all the usual wrong small investor reasons. I was in love with eBay, it was a wonderful thing, nothing but good times ahead. I sold them this March at $30. I broke even, taking into account capital gains tax, commissions, and the decline in spending power of the dollar between my purchase in 2001 and eventual sale 89 months later. eBay shares have never paid a dividend. How could this be considered a good investment?

Using the MSN Money Central chart, I checked eBay stock prices on the first trading day each month between April 1st (when John Donohoe took over) and October 1st, 2008.

Other than a one week 'honeymoon' when the stock rose a whole $1.02 from $31.42 to $32.42, it has been pretty much down hill each month all the way for six months.

Apr 1st $31.42
May 1st $31.78
Jun 2nd $29.31
Jul 1st $27.74
Aug 1st $24.58
Sep 2nd $24.07
Oct 1st $20.85

Auntie May (the fictional dumb small seller of fleamarket junk) & I calculated this is a 33.67% drop under Donohoe's stewardship. Not small potatoes but we didn't even have to take our socks off.

At what point are the institutional investors going to join the sellers in being 'disgruntled' & 'revolting'?

I am no longer an eBay shareholder.




Y'all come back!








Related articles and Links:

Splat! Splat! Gossip

On September 14th the Fubarometer showed eBay listings dropping like a stone down a very deep well. On their graph numbers fell from 14.5m to approximately 13m.

This matched the stock price which closed close to a 5 year low.

I like to have more than one source of information so I waited for the Medved figures which have proved trustworthy in the past. This was a wise decision.

Medved shows (in their weekly chart for the week starting September 14th) that listings have dropped over the weekend from a high of about 16.04M to below 15.6M

In other eBay news Scott Pooler posted about Jet Blue, rumored to be eBay's latest Diamond PowerSeller in the making. Apparently Jet Blue was making some serious listing violations. Galvanized by this humiliating news eBay removed all Jet Blue's listing within minutes. Good job Scott!

Scott Wingo posted a speculative opinion piece on his blog eBayStrategies about eBay layoffs. The comments on Scott's blog are even more interesting. Will we see a rambling rebuttal clarification from Uncle Griff on eBayINKblog? Probably not because Scott is a Very Important Person; from his biography we learn

As President and CEO of ChannelAdvisor, Scot Wingo leads the company in its mission to provide retailers and manufacturers with the tools and services they need to successfully utilize consumer marketplaces as a sales channel.

ChannelAdvisor, founded in 1999 was recently in the news itself. At the beginning of the month the company announced it had received an additional $20 million in funding to accelerate its growth; and was cutting about 20% of the workforce in an effort to accelerate its push to profitability.

From the NewObserver

The funding round was led by New Enterprise Associates (NEA) with participation from current ChannelAdvisor investors Advanced Technology Ventures, Kodiak Venture Partners, eBay and Southern Capitol Ventures. Wingo said the new funding will be used for general corporate operations, but no new acquisitions are planned. He expects the company to become profitable next year.

A clue!

To be successful one must have both the credibility and ability to borrow $100 million. After that you can take 10 years to show a profit.





Y'all come back