Trade eBay Inc. Stocks
eBay Inc. (Nasdaq: EBAY) is a leading US. based e-commerce company based in San Jose, CA. It was one of the very first auction-based websites, having been launched in 1995 by Pierre Omidyar as a part of his personal website. The company facilitates both business-to-consumer and consumer-to-consumer e-commerce, with tens of millions of items listed and sold on the website. Buyers can use eBay for free, while sellers are charged a variety of fees based on the items they sell. Charges are only levied when items are sold.
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Besides its original auction-style sales, eBay has added several other sales features. These include the instant “Buy it Now” feature, online classifieds, online ticket trading, and shopping via SKU, ISBN, or other product numbers. It also previously offered money transfer through PayPal, which was a part of eBay from 2002 through 2015.
The History of eBay
eBay started as The AuctionWeb on September 3, 1995, as part of computer programmer’s Pierre Omidyar’s larger personal website. One of the first items sold on the site was a broken laser pointer. Astounded that someone would buy such a thing, Omidyar wrote a note to the buyer to ask them if they understood the pointer, they had bid on was broken. The winning bidder responded, “I’m a collector of broken laser pointers.” That was the first sign of how large the site might become.
The Beginnings of eCommerce
Soon it was the first online auction site that allowed for person-to-person transactions. That helped the site grow dramatically in those early days. Ironically, Omidyar kept the site running as little more than a hobby until his internet service provider forced him to upgrade to a business package ($250/mo versus the prior $30/mo) due to the large influx of traffic to the site. This forced him to charge sellers for using the site, but no one complained about the small charges.
The company changed its name from AuctionWeb to eBay in September 1997, after which they received $6.7 million in funding from Benchmark Capital. Business at eBay grew quickly as the company expanded its product categories to include nearly anything that could legally be sold online. By 2000 eBay had 12 million users and an average daily inventory of 4.5 million items for sale. The company bought European auction site iBazar in February 2002, and later that year in October 2002 eBay purchased the online payment gateway site PayPal.
By 2019 eBay had a user base of 183 million users and revenues of over $10 billion.
eBay and Activist Investors
After 12 years eBay announced in September 2014 that they were spinning off PayPal into a separate publicly traded company. It was a surprise to many investors, who considered PayPal to be the crown jewel of eBay’s business. The spin-off came due to demand from activist hedge fund manager Carl Icahn at the beginning of 2014. Ironically the move had little impact on eBay stocks price. At the time then CEO John Donahoe stepped down over the move, citing his disagreement with the decision to spin off PayPal. Devin Wenig replaced him as CEO.
Fast forward to 2019 and eBay came under pressure from activist investors Elliott Management and Starboard Financial to spin off its StubHub business and the classifieds business of eBay. In an eerie echo of the 2014 pressure, the event caused Devin Wenig to step down as CEO in September 2019, citing his disagreement with the decision.
In 2017 eBay reported revenue of $9.567 billion, or a growth of 6.6% over the prior year. Unfortunately, it also reported a loss of $1.016 billion, its first annual loss in over a decade. The company did bounce back the following year. For the fiscal year 2018, eBay reported a profit of $2.53 billion, with annual revenue of $10.746 billion, or a 12.3% increase over the prior year.
eBay Stocks Price History
eBay went public on September 21, 1998, at $18 a share. It was the beginning days of the dot-com boom, and as one of the most successful e-commerce companies of the time, it wasn’t too surprising to see eBay stocks surge to close that first day of stock trading at $47.375 a share for a one day gain of 163%. On a split adjusted basis, this was $1.9742 a share. Price edged lower in the coming weeks as early investors took profits.
The profit taking didn’t last long, however, and price reached $12.31 (split adjusted) in April 1999 for a gain of over 500% in six months. eBay stocks actually held up fairly well during the dot com bubble, but still traded as low as $2.81 a share in December 2000. Price soon recovered to the $6 level and remained range-bound near that level until September 2002. The next rally in eBay stocks began there, with the price rising to $24.92 by December 2004.
eBay in Decline
After reaching that December 2004 high shares began a long, slow decline that would last for just over 4 years, ending in March 2009 at a low of $4.17 a share.
Since then shares have mostly performed excellently, rising steadily for nearly nine years to reach $46.99 in January 2018. The stock fell hard off that all-time high however in response to the 2018 loss posted by eBay. By the end of the year shares had retreated to $26.01.
After rebounding in the first half of 2019 and trading above $40 shares pulled back in the second half of that year as investors disagreed with the pressure being put upon eBay to sell its Classifieds division and the StubHub subsidiary. As of mid-January 2020, eBay shares are trading at $34.89 a share. Taking splits into consideration an eBay IPO investor of 100 eBay shares would have 5,702.4 shares as of January 2020. This means a $1,800.00 investment in September 1998 would now be worth $198,956.74.
eBay Stocks Trading Ideas
As of January 2020, there are two potential setups to keep an eye on.
One is a key support level at $34.52. If eBay stocks break below this level, there’s a very good chance it will follow through by dropping all the way to $30 a share before finding any additional support. Conversely, if this support level holds, we’ll have a double bottom printed on the daily chart, which could be our first signal that the trend has reversed for eBay, and the stock is headed higher in 2020.
The second is also a short selling technical setup. eBay stocks are trading under the 200-day moving average as of mid-January 2020, and a bearish cross of the MACD has just occurred. That’s a bearish setup, and it is also looking like a very broad head and shoulders pattern may be in play, with the second shoulder now looking ready to break the neckline at the $34.65 level.
Both plays have a similar target at the $30 level, and they are also complimentary for short sellers.
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AvaTrade eBay Stock Trading Information
- eBay Stock Symbol: #EBAY
- Trading Times: Monday – Friday 14:30 – 20:59 GMT
- Country: USA
- Currency: USD
- Exchange: NASDAQ
Trade eBay stocks with AvaTrade and enjoy the benefits of trading with a regulated broker.