Numbers good / shares dropping – eBay’s third quarter report

ebay homepage © Kai-Thomas Krause

Last week eBay presented its numbers for the third quarter 2011. If you take a look at them, there is solid growth in every KPI. One of the strongholds of eBay still is PayPal which keeps growing in means of user base (14% compared to 2010) and also revenue (32% compared to 2010). The drivers here are the focus on penetration in eBay and further merchant and consumer adoption. The payments volume grew 31% to $29.3 billion compared to 2010. The company says, that they will keep a strong focus core platform development as well as on mobile and POS payments and will invest in innovation in these areas.

In his statement the CEO focused mainly on mobile commerce and it’s perspectives: “Our company reported another strong quarter, with eBay, PayPal and GSI each performing well,” said eBay Inc. President and CEO John Donahoe. “Mobile commerce continues to accelerate as consumers change the way they shop and pay. We expect eBay mobile commerce to generate almost $5 billion in merchandise volume this year and PayPal mobile to exceed $3.5 billion in payment volume. Mobile is one way online and offline shopping are blending into a single commerce environment. We are focused on enabling commerce, helping consumers shop anytime, anywhere, and being the commerce partner of choice for retailers of all sizes.” (Source: eBay)

But despite this positive report and the good numbers, the stock market was not happy with eBay. The eBay shares dropped 4% to $31.80 after the report was published. Until the end of the week the curve did not really recover and stayed down at $32.10. As a reason for this Market Watch identified eBays mentioning of an “Ok holiday season” and the strengthening dollar. They state Ben Schachter of Macquarie, who wrote to clients on thursday: “The bottom line is that eBay’s execution remains solid, but with unexciting revenue guidance and meaningful margin pressure as the business mix evolves, we see little reason to own the stock at current levels.”

So the question for eBay is: How well will the recent acquisitions of eBay (GSI, Magento) blend in and define a clear and strong business mix, to get sexy again for the stock market? Also despite the good numbers – the PayPal growth rate of 32% is the weakest ever, which worries lot’s of stock analysts… We are curious how the road ahead will be for eBay – stay tuned to get the update!

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