eBay, Inc. (EBAY)

Things go from bad to worse since John Donahoe has become CEO, no one is happy, I am at the top of that list and the list is very long.

I want to make it clear, I am a wholesaler and not a writer or a stock expert, but I have a first hand inside look having been a powerseller for over 10 years, 1.7 million per year sales and account for $156,000 paid to e bay per year for seller fees, this is the bases in which e bay shows profit or loss in a great way, this does not account for paypal fees charged, seller manager pro, e bay stores. E bay was a beautiful place before it has crashed and failed not only its buyers, but its sellers. This, although it would seem, at the moment, can be seen by the stock prices offered currently.

E bay has spoken, treated us with disrespect, no conformity in answers received from e bay or policy's, put sellers of 10 years who set our business to service the e bay market in a bad financial strain because of an aggressive unfair policy (which e bay keeps it sellers in the dark how to quantitative it), sellers have listed and regrettably moving on to something else. These are resourceful business people who will do well marketing for another company. It should be noted that these sellers are also buyers and I personally buy a few thousand on e bay per year, they will not see another dollar from me.

Anyone considering investing or putting time into future sales may want to take a look at the aggressive policy’s they have put in place (There are little to no direct policy as there has been for the last 10 years) it is now “at there discretion” rather than a written or qualitative policy in many cases. This is making the company policy as un uniform as it has ever been. Even when the rules were written for all to see, there were interpretation issues, however, now it is just up to the person answering the phone or sending the e mail and no room for improvement or debate to better or change. Although communication has always been an issue for E bays customers as well as sellers on message boards complain how hard it is to get in touch with them and when you do no one on the other end seems to be empowered to help or care to do little more than quote out of the corporate handbook offered in form letters and help pages. If you are as lucky as us to have been a powerseller, you can call and sometimes have your call returned within 3-4 business days and hope to be available at the time the call is returned, you can ask the same question to 10 different e bay “officials” and get 10 different answers that do not relate to one another. This is not a speculation, this is based on personal experience as well as discussions with other large sellers. They have turned a blind eye to its sellers and buyers alike. I wouldn't be leaving if there was any good reason to stay.

I admit, service needed to be better, customer service is something that all should be striving to improve, there is a way to do that without destroying the e bay fabric that has worked so well in the past. I have a business to run, so there is not enough time to go into all details of in site, there are many dissatisfied sellers (who drive e bays profit) and dissatisfied buyers (who drive the sellers profit) and it does not take a NBA to fugue out the future.

E bay has done a poor job or emplaning the new changes to its buyers, sellers only after a few months of effect, some loosing there e bay business because of improper, unmonitored data, is still learning and it seems no one knows the answers even at the top account managers level. Its buyers do not realize that the DSR DETAILED SELLER RATING, the 5 stars under the feedback rating is not based on a 100 point scale like every other system in the free world. For example, from 1 to 5, 1 is poor, 3 is average and 5 is excellent. With e bay, 4,5 is average and 5 is good, I am glad they didn't have my math teachers in Collage. So many times buyers rate a 3 when they don't realize they are giving the seller a unacceptable rating that could potentially suspend his/her account from e bay as so many has been suspended in the last 3 months because of improper data that has been now used as the bible of e bay to rate seller performance. It should also be noted that a flaw in the data of the 5 star DSR is that if a customer is happy, they fell that leaving positive feedback served its purpose and they have caused a positive vote to the seller, e bay has not educated the buyer, so they do not leave a star rating at all, and are not required to and a large % do not, but leave a positive feedback as it is not required. But the buyer who is mad and is leaving hasty feedback will be more than motivated to leave a 1 or 2 for all stars. For this reason, good sellers offering great service and products are being suspended from e bay by record numbers, this cuts the life cord of the seller as well as e bay.

Ebay has ruined their market flair for both buyers and sellers. Too many restricting rule changes, increased charges, paypal demands, seller ratings. This has ultimately destroyed their bottom line.

I was talking to another large seller, he said something that is funny but true, he said "e bay is the only company I know to date that has actually implemented the policy of THE BEATINGS WILL CONTINUE UNTIL MORAL HAS IMPROVED"

Ebay is definitely a stock headed down down down. The Wall Street analyst’s who cover Ebay need to find out what is really going on because the sellers who actually use ebay have been seeing it for the past several years as seen by past message/blogs. Anytime a company treats their customers with little or no concern, it’s not a good sign for the future.

There are alternatives to ebay and they are getting stronger everyday while e bay lets it strong sellers go who offer products that drive customers to the site. Many of them showing up to other sites and, yes, drawing e bay customers to competitors site.

CNBC analyst Jim Cramer said he could not get behind the company, and that someone should buy the company "and put them out of their misery." That is a big statement in and of itself, however, that with all the negativity on message boards from its sellers and buyers in the past few months should have already grabbed someone's attention at e bay it would seem and some favorable policy changes would have followed already, this didn't come and could come too little too late.

It has been pointed out that CNBC analyst Jim Cramer said to buy, buy, buy at one time, the people who listened did well at that time. He has good in site to this company it would seem. Now I think this Caramer is a voice to listen to as he has made it clear that there is problems now, not anything that large sellers have not already foreseen for the last year.

http://www.marketintelligencecenter.com/articles/649789

http://www.thepetitionsite.com/1/ebay-buyers-concerned-re-feedback-changes

http://www.thepetitionsite.com/1/new-feedback-policy-unfair-for-sellers

Articles from bias 3rd party's are now starting to surface all over the Internet community, although limited to in site, show they know of seller dissatisfaction:

http://seekingalpha.com/article/95329-ebay-is-a-losing-bid-barron-s

It is speculated that the Standard & Poors rating will be updating soon, because of e bays unpresidented fast and agressive changes made in the last couple of months have not given any room for changes of amindments of ratings yet, but I will asure you they are coming the changes were simply done so fast and agressive that ratings have not had time to catch up. It would be advisable to keep a close eye on this in a few months when agressive policy changes reach the rating level.

I have a dedicated special interest and hope they turn themselves around, but it is going to take some quick and correct policy change to undo what has been done in what would be considered by many as "the most aggressive change e bay has ever done" it is costing sellers there business, although it is realized that a very few had to go, they are taking the good sellers, some of them my competitors out in the process. Not that I am sad to see some of my competitors go, it is still sad to know that these people have sold on e bay for 5-10 years, know they have adjusted themselves to e bay, the kind of inventory, business plan, warehousing and equipment and 100's of thousands in inventory stuck in the warehouse they cannot sell, all of this done to a veteran of e bay because of policy changes made/implemented over just a few months.

Overall fees have been raised twice this year, significantly. STR is dropping like a rock. The Best Match search is fatally flawed and $035 listings are not going to fix that. Buyers can't find anything. Sellers can't sell and are being abused both by eBay with the hateful DSR system, and by bottom feeding scammer/buyers, because there is NO seller protection. There is also NO customer service. Sellers of the unique items that made eBay famous (and who paid listing fees) are leaving in droves, while eBay brokers deals with corporate sellers of new stuff you can get anywhere who don't pay listing fees. And their buyers are following them. Watch the Q3 figures.

Now 20% off recent highs, I think this is an excellent time to buy one of the top companies in the world. Though sometimes it swings and misses, management has shown an ability to stay on the cutting edge of marketplace technology. The world's largest buying and selling platform will still be that a decade from now.

OK, here's the deal: All you business majors sit around crunching numbers, looking at PE, Cash Return, Return ON Equity, etc., and say Ebay is a steal, and everyone should buy it. As anyone can see on this site, you all have been saying that for over a year, and the stock has continued to plunge. If you Google "Ebay sucks" or "PayPal sucks", or "immediate termination of Ebay CEO John Donahoe petition", you'll see what's REALLY going on at Ebay. The CEO is a business school idiot, making absolutely asinine changes that are taking Ebay down the tubes! He is totally out of touch with his customer base. I have been a seller on Ebay for 10 years, and am being squeezed out by ridiculous fees and being forced to use their own on line payment system, PayPal. Do all you business school majors realize Donahoe went to business school, too? FACT: PayPal is holding up payments to sellers for up to 30 days, and makes it a pain in the ass to collect YOUR money from them. RESULT: PayPal shows TONS of cash on the books. Problem is, it's not their cash they're showing you! FACT: When Donahoe changed the feedback system on Ebay, making it impossible for sellers to leave negative feedback, and nearly doubled Ebay's Final Value Fees, sellers organized a strike last Feb., which was only loosely organized in less than a month. Ebay said "We're not worried! Ebayers support our changes to "protect the community" of Ebay!" To attempt to offset the effectiveness of the boycott of sellers, they generated 100,000 FALSE DESCRIPTIONS on Ebay, and were caught at it by the press. When called on it, they claimed to be "testing the system". These are only 2 examples of the many stupid, out of touch changes made by Donahoe. Before you buy stock, or recommend buying it to someone else, do your homework! Check out those pages I quoted above to hear about ALL the changes and problems at Ebay. Don't just look at the numbers THEY'RE giving you. In a time when people should be flocking to Ebay to sell their excess belongings, they're instead going to Craigslist (which Ebay is attempting to BUY, to eliminate competition.) EBAY IS GOING DOWN THE TUBES! SELL THE CRAPPY STOCK BEFORE IT'S TOO LATE!

This always-expensive-looking stock has always beaten the market for me via the long term. When I first bought in 1999, my shares doubled within 6 months. By 2002, post-Nasdaq-crash, I had given it all back, having returned to my cost basis. From that point on, EBAY stock has been a winner and now judged over the 7 years has almost tripled and is well ahead of a flat market. I think that's the way you have to approach stocks like these, sometimes. You're paying up in the short term for something that looks overvalued, may sell off (will, badly, sometimes), but if you hold an excellent industry leader like EBAY, as profitable as it is, you are rewarded. You beat the market. Just watch.

EBAY is the CAPS of the reselling jungle. Projected annual return of 22% on 8/24/2006.

Just finished researching this stock. Needless to say EBAY's profitability and stock valuation are outstanding. PE, CASH RETURN, RETURN ON EQUITY, PE VERSUS HISTORIC PE.....By all these measures stock is undervalued. They will be able to whether a depression type era because they have no debt and are cash flow positive. Worst case is that they may have to exit small markets and cut overhead count. They employ a lot of people. Growth and Earnings stability are questionable in the short term. Long term prospects are great because the moat they have. Buyers looking for odd or hard to find items can find almost anything on EBAY. Contrary to what some may say their search is pretty good. EBAY will have to reduce commission fees and bring the balance back to the FORCE however between buyers and sellers. It strikes me as odd that sellers can no longer leave feedback on buyers.

So why should they reduce fees? I think they should reduce fees because their moat comes from being the place where you can find anything. From the seller's perspective lots of eyes make it easy to sell hard to sell products. So Volume begets Volume. With a slow economy lowering commission fees is like giving the tax payers a tax break. This should increase sale transactions. Remember their moat comes from sales transactions. I think right now it is critical for EBAY to do this even though the stock price and immediate earnings could take a hit. So here are three solid reasons they should bypass current earnings for future earnings by reducing fees:

1) Volume begets volume. Moat will increase relative to competition.

2) Will enable their sellers to cut prices making EBAY a place where shoppers can still get a good deal.

3) Profit margin relief for their sellers. You don't want EBAY to shrink 20% because 20% of their sellers are forced out of business in a slow economy. This would allow small start up competition to potentially gain a foot hold.

Personally I can't stand paypal. As a casual shopper its a hindrance. On the otherhand I buy 5-10 things a year from EBAY. Its really a great website to comparison shop and to find items that would normally (without EBAY) be impossible to find.

I read some of the complaints from other posters about EBAY. So i did a test. My 4 year old's (Easter Bunny present) from two years ago broke. I've tried but I can't fix it. So I though maybe EBAY will have it. Someone else bought this so I had no idea what to type. I started with Easter Bunny "lets go to the hop". Nothing hit. Then I tried Singing Easter Bunny. Only one came up but there was a picture of the 2006 Hallmark Easter Buddy..... You would never find that item on any other internet site

Bottom line. EBay is a really great company with a moat that no one else can reproduce. Company is finanically strong and extremely profitable. Company will make money next year too. Stock is priced for a worst case scenario which is unlikely to happen. They have made and will make more mistakes but their moat will allow them to correct things and keep the good ideas. They are profitable and will be even in the downturn. Ebay was selling for current prices back in 1998 or 1999. So I'm buying. Its my chance to finally buy a rule breaker who is also a blue chip company at a value stock price. Can't be beat.

only a bargain hunter knows where to find a bargain. i see some bumps along the way due to sellers and their issues. ebay is a service that is there to help you sell your goods, not rob you. stop crying and move on if you feel that they are to expensive, you do have a choice. bottom line i am a paypal supporter and ebay buyer. just because i wont sell anymore items on ebay, doesn't mean i wont shop there. all my electronics and car parts come from ebay and no one else compares to the prices they have! ebay is just trying to weed out the weak sellers and bring in the real earnings!

With the meltdown in sub-prime along with decreasing values in the housing market, Ebay becomes the new pawnshop for the new financial crisis. Expect sales and profits to rise as a result of the meltdown in housing and tightening of credit.

It's transitioning from a growth stock to a value stock (see Microsoft). It spent too much on Skype, which won't help it in the short term. I can't see a catalyst for growth unless they buy into a hot concept that takes off (like News Corp spending $580 million on MySpace). Organic growth prospects look grim.

From furniture to Russian Brides to Cheetos that look like Winston Churchill, is there anything you CAN't buy on Ebay? If there is, I don't want to know about it because it probably isn't worth bidding on.

Ebay's core business model is simple and strong. As time goes on, it will inevitably become stronger and stronger. As it gets bigger it becomes more difficult for any meaningful competition to mount.

Imagine a company that manages to anger a large number of those people who pay for their services.

Imagine a company who demands greater customer service from the people who pay them, than they offer those people.

Imagine a company who spends more money to advertise and sweep things under the rug, than to address the issues.

Imagine a company that is willing to waive more than $25 MILLION in fees, to demonstrate and artificially inflate listing numbers-- such as what eBay did with Buy.com. And, btw, Buy.com's Final Value Fees would have been less than $165,000 during the same time frame as the investigation took place.

Imagine a company who's stock dropped 65% in less than a year, blames it on the economy, yet, their competition enjoyed record profits!

It was not too long ago that EBay stocks were $40-50 a share; now they are $10-15. And, don't let them fool you. It has little to do with the economy, and everything to do with policy changes, and the ebay boycott. Again, this can be seen by the competition increased profits!

I'm an eBay seller. Below are the fees I paid eBay in the last 2 years:

2005 eBay fees: $16.6K = 21% of sales
2006 eBay fees: $21.1K = 28.3% of sales

In 2005, 27.7% of the items I listed on eBay sold. In 2006, 18.9% of my items sold. I've been selling the same items both years, most of them for around $10.

What I see is my eBay fees going up and my sell through rates going down. Maybe it's only the items I sell but I've heard a lot of other sellers complaining that their sell through rates are going down as well.

eBay decided to increase fees starting Feb 07 which would again cut into my profits or I would have to increase my prices. On top of that, USPS will announce a large increase in postage in the Spring. If I decided to continue selling, I would have to increase my prices/shipping fees. Are buyers willing to pay more money for the items they can probably find cheaper somewhere else? I don't know.

Since the beginning of January, I stopped listing any new items on eBay as I'm seriously considering just getting rid of my inventory and calling it quits. This is something I do part time so I can afford to do that. I would miss the extra income but there comes a time when it's just not worth my time. A lot of sellers make a living selling on eBay so they cannot afford to do that. Is eBay going to miss my fees? Probably not. Are they going to miss it if 1000 sellers like me do that? Probably.

At the moment, eBay is just about the only game in town so sellers have nowhere to go. There are other alternatives like Yahoo or Amazon auctions (and others) but they don't even come close to eBay. If that was to change, you would see a huge number of sellers abandoning eBay. Maybe that will never happen but who knows?

eBay is taking advantage of being the monopoly by squeezing as much money out of seller as they can because they can. I do not believe that's right and I think it will hurt them in the long run.

My goal in writing this was not to complain about eBay but to warn and educate potential investors. Without sellers and buyers eBay is nothing. I think eBay is upsetting both (sellers with constant fee increases and buyers because they're really the ones who pay for those increases). How much more are buyers willing to pay?

This Buyer & seller Boycott is gaining momentum! It is planned for Feb.18th Feb.25th & beyond.

Q. ebay will NOT listen nor respond to buyers & sellers. How will a company grow if a CEO refuses to listen to the people who are feeding them?

Once the buyers and sellers are gone. They will establish themselves eslewhere. It would be very difficult to have them come back.

I am one of the many powersellers who have shut down my store & have joined in the growing numbers to Ban ebay.

Stock price has fallen, so I believe the price is good entry point. As to why I believe it will outperform, it will perform well because of new parnership with yahoo, increasing paypal, hopefully turn skype into subscriber platform both for incoming and outgoing calls, and make a deal in china that will increase performance there because competition in hurting them their and needs to be somehow improved.

1) A near monopoly on auctions due to network effects,

2) PayPal -- Solid already but looking to expand into payments by mobile phone

3) Skype -- Everyone thought that was a horrible acquisition. Could it be that everyone was wrong?

Only thing that worries me is Craigslist. I think it is going to continue to take market share from Ebay.

Ebay is a true hidden gem. They are making loads of money and it doesn't look like anyone will be taking over their mindshare. I think that ebay will do great things in the next year.

This was originally intended as a reply to EBAYSAD's pitch, however CAPS wouldn't let me post it. For whatever reason the "preview reply" button did nothing. I figured it was long enough to be my pitch anyway, so I'll add it this way:
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Agree 100%. I'm currently a seller and I'll be throwing in the towel in a couple weeks when their new policies go into full effect. I'm tired of their attitude towards sellers, and it's to a point where too many of the items I sell are sold at a loss, after factoring in all the fees and time commitments.

Capping shipping charges by category is stupid, and only serves to compound the effects of increased fees. The caps assume all items sold within a category are the same size and shape, and can be shipped for the same price. $4 to ship a dvd may be “average,” but what if I sold a large box set? I can’t charge more than $4 to ship it? Am I supposed to just eat the difference? And the DSR system is broken, and punishes sellers unjustly. I recently had to back out of a transaction because the item I sold got damaged in a move, and I informed the buyer while providing a full refund. No questions, no arguments, just an honest refund. What did he do? He left me “neutral” feedback, marking me zeros on all the DSR categories (I know this because my shipping time rating went from 4.6 to 4.4, immediately after he left his feedback). And with these systemic flaws, ebay plans to ban sellers whose ratings dip below 4.3 in any category? Excuse me? And how is a rating of 4.3 out of 5 expected to be bad? If the 85th percentile is considered unacceptable, you may want to reevaluate your grading scale…

I could go on and on, about how ebay’s community has degraded, with the process of buying and selling becoming a genuine hassle. It’s lead vast amounts of people towards hating the service, environment, and company.

It’s infuriating how ebay’s policies seem to have been engineered to chase out the small-time sellers, but there’s little I can do beyond deal with it or cease selling completely. I’ve been dealing with it long enough, now it’s time to just cease selling. I’m not alone, and I wouldn’t be at all surprised if significant numbers of small sellers disappear as a result of these coming changes. Ebay’s unprecedented variety of products for sale will likely come with us.

Ebay’s policies seem to have been designed to discourage the use of the auction format, and encourage a “buy it now” dutch auction style. This format is only conducive to certain classes of product, and virtually all of these items can be bought elsewhere (online or off) without hassle. DVDs, PS2 games, and music CDs can be bought anywhere, why would you need to go to ebay?

it's unfortunate how out of touch ebay's management has been, all they needed to do in order to ensure the success of their business was stay the hell out of everyone's way. Enforce security, but beyond that let the sellers and buyers do business without excessive intervention. Ebay went from being a one of a kind, truly open market place to being a poorly managed Amazon knockoff in very short order. Not 2 years ago they were a thriving community of independent buyers and sellers, now they are rapidly heading down a path of irrelevance in a sector they created.

A truly comparable alternative to ebay will emerge eventually, however I fear that by that point the community will be so fragmented that we'll never see a return to the halcyon days of the late 90s - 2004/5 ebay.

the bearish sentiments are overlooking the Paypal opportunity for Ebay. Currently growing at 37% yoy, Paypal is the next big chance for Ebay to succeed. Dodge & Cox purchased eBay shares in Q4 of 2006, which is a great vote of confidence. Dodge & Cox is known to beat the S&P consistently.

many use ebay