eBay INC 2011 3rd Quarter Earnings Call Numbers Of Interest To Small Business Sellers
20 October 2011
EventHorizon1984
eBay INC CEO John J. Donahoe lead eBay’s Third Quarter Earnings Call with the bold statement, “Q3 was another strong quarter for our company.“, while the mood on Wall Street, “EBAY left investors unimpressed,” was less energetic. Which leads to the routine question asked by small businesses on eBay, ‘How did the Marketplaces section eBay.com do?’.
Well.
Numbers from eBay’s 10/19/2011 SEC 8-K filing show net total Marketplaces quarter to quarter revenue growth essentially dead. Down from the previous quarter growth of “5%”.
Keep in mind that part of the second quarter growth of 5% can be attributed to eBay’s 6 July 2011 additional fee on shipping costs.
Edgar Online – eBay Inc – 8-K – 10/19/2011
Marketplace revenues are principally generated through fees paid by users of eBay.com. The payees being the business who use eBay.com to sell products.
What of the number of products that eBay’s less than 1% revenue growth came from?.
According to Medved.net eBay started the third quarter with over 138 million listings per day.
The third quarter ended with approximately 152 million products.
If you were selling on eBay.com, were you using PayPal?
Edgar Online – eBay Inc – 8-K – 10/19/2011
The number of PayPal payments made was a health “6%”, compared to the previous quarter’s increase of “2%.” The PayPal payment volume however was down to “2%”, compared to second quarter’s “5%” increase.
Edgar Online – eBay Inc – 8-K – 10/19/2011
According the eBay.com numbers, the “Take rate” has remained stable for the past year. The third quarter “Take rate”, that is the percentage of a PayPal transaction that Ebay INC keeps, stands at “3.78%.”
What about eBay INC’s Bill Me Later payment method?
eBay INC reports Bill Me Later losses decreased and increased. The Net charge-off rate has improved slightly to “4.3″ from the second quarter’s “4.4%.” But the 90-day delinquency rate has risen to “2.6%”, compared to the previous quarter’s “2.2%.”
With payment transaction losses remaining more or less stable, it remains to be seen why eBay INC continues to increase the amount of funds held from eBay’s customers. Going from 2010 fourth quarter’s $2,550,731,000 to this quarter’s $3,295,115,000. Yes, that’s 3.29 Billion dollars.
Edgar Online – eBay Inc – 8-K – 10/19/2011
What about the continuing buyer and seller claims that there is less merchandise on eBay.com. How deep is eBay.com’s product selection? Let’s look at the value of merchandise sold.
Edgar Online – eBay Inc – 8-K – 10/19/2011
According to eBay INC in their 8-K statement, Gross Merchandising Volume (GMV) represents the “Total value of all successfully closed items between users on eBay Marketplaces trading platforms during the quarrter, regardless of whether the buyer and seller actually consummated the transaction.”
GMV quarter to quarter growth is essentially dead. Third quarter shows less than one percent movement, compared to second quarters “1%.” And what of John Donahoe touting a GMV increase of 16%? It’s the year to year increase. And this year’s GMV, $14,666 million, is coasting downward off of eBay’s record 2010 year end GMV of $15,039 million.
The GMV for vehicles decreased “-4%” quarter to quarter. A significant fall from the “9%” increase of the second quarter. Year to year Vehicle GMV growth is also essentially dead.
“EBay is still best known as a discount flea market retailer.“
John Donahoe became eBay CEO in March 2008, and concluded his third year of CEO stewardship in March 2011. Has there been progress for eBay.com under CEO John Donaohe?
It appears from the above metrics that eBay sellers in aggregate have had their say in the matter. Here’s the non-seller stock market view.
At the start of John Donahoe’s tenure, eBay INC’s stock price was 29.84 (31 March 2008). Between then and now, the stock reached a top price of 35.35. It is currently trading at 32.14.
Trading is mildly frantic with current volume at 25,643,763 versus the average daily transaction volume of 14,794,700 shares.
According to eBay INC’s official investor page, in the matter of eBay INC stock dividends:
Which means for the average individual investor to materially benefit from eBay INC stock, they must sell and/or buy the stock. In other words, ‘buy low, sell high’, short, long, et al.
Over the three plus years the eBay INC Pop & Mom investor made $5.51 per share, or posted a 19% return on investment. Assuming they sold their shares when the stock peaked.
Then there’s the competition.
Amazon closed at $71.30 on 31 March 2008. Amazon stock is currently at $233.61. Meaning the Amazon Mom & Pop investor would make $162.31 selling their stock now. If we have our sums right, that’s a 227% return on investment.
$5.51 versus $162.31. Hmmm. The difference between buying a cup of coffee at Starbucks or an iPod from Apple. As a side note:
- Starbucks
- 31 March 2008 $17.50
- 20 October 2011 $40.99
- Apple
- 31 March 2008 $143.50
- 20 October 2011 $395.31
With the tepid response to eBay INC’s stock price over the past three plus years, there is possible good news for John Donahoe, regarding Amazon’s Third Quarter 2011 Earnings Call scheduled for 25 October 2011. It may never happen.
Harold Camping is proclaiming, again, that the World will end tomorrow.
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Related articles:
Amazon eBay 2011 Earnings Call Pre-Game Tale of the Tape
eBay INC Stock Price During CEO John Donahoe’s Tenure
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“Most folks on Wall St. view eBay really as PayPal plus a marketplace …”
http://ebaystrategies.blogs.com/ebay_strategies/2011/10/could-ebays-worst-nightmare-be-happening-soon-.html#disqus_thread
Both John Donahoe and Scott Thompson are simply delusional if they think that PayPal can continue to underpin the faltering eBay “house of cards” by becoming even a minor threat to the existing banks/Visa/MasterCard payments systems at traditional Point-of-Sale—the idea is pure science fiction. (Beam me up Scotty!)
The real question is, when are the world’s various “banking” regulators going to finally do something about over-sighting this unethical, unprofessional, unregulated and clunky financial operator that not only acts like a bank—an unlicensed bank—but is in reality an unethical money gouging arm of the Ho’s “eBafia”?
Even though PayPal clearly offers banking-type services (ie, holding users’ funds in non-prudentially regulated and non-FDIC insured banking-type accounts), PayPal is mostly registered in some places not as a bank nor as a provider of credit but only as a “money transmitter” (like Western Union), and indeed PayPal itself has claimed that they “are not a payment network”, and there is a grain of truth in that claim because most (but not all) of their activities facilitate the transmission of funds simply by riding on the back of the banks’ existing payments processing systems.
In fact, the only thing creative about PreyPal has been their founding use of users’ unique email addresses as identifiers for online payment transactions. PreyPal is otherwise no more than a blood-sucking parasite riding on the back of, and in the main cannot function except via, Visa/MasterCard and the banks’ existing payments processing systems.
Regardless, outside of PreyPal’s mandated use on whatever will ultimately be left of the Donahoe-stagnated eBay Marketplace, PreyPal (and most other third-party payments processors) will eventually be consigned to the history books by the retail banks/Visa/Mastercard once those players get their “online” act together. There is nothing surer than the sun will rise in the morning.
Both eBay and its ugly daughter PreyPal are most devious, unethical, unprofessional organisations: they have both become the most despised commercial entities on the planet—apparently, even more hated than “the banks”. eBay, amongst many other things, has forever knowingly and criminally, facilitated shill bidding fraud on their trusting auction buyers. And what else can be said about PreyPal that a great many PreyPal merchants don’t already know, to their cost …
Having said that, it’s possible that PreyPal can survive by becoming the merchant account provider “of last resort” for those very small or unscrupulous merchants unable to get a real merchant account from their own bank—Oh, hang on, hasn’t PreyPal always been just that, and charged all their users accordingly?
eBay, a Knowing Criminal Facilitator of Auction Shill Bidding Fraud: Case Study #4:
http://forums.auctionbytes.com/vbulletin/showthread.php?t=23540
PayPal Claims that PayPal Is Not a Payments Processor!
http://forums.auctionbytes.com/vbulletin/showthread.php?t=24148
And, from along the way, a compilation of (mostly inane) quotes from eBay executives:
http://forums.auctionbytes.com/vbulletin/showthread.php?t=24159
Enron / eBay / PayPal / Donahoe: Dead Men Walking.