Search results matching tag 'eBay'

GM ends eBay sales test

Kim Peterson — Wed, 30 Sep 2009 19:27:00 GMT

General Motors turned to eBay (EBAY) last month in a desperate attempt to sell more cars, hoping for a new sales channel as it shuts down dealerships across the country.

It didn't work. After just seven weeks, GM has decided to end the online program. Dealers say it didn't help them sell more vehicles -- in fact, buyers started lowballing them for better deals, The Wall Street Journal reports.

"We thought the program was successful but that this was not the right time," GM's sales chief told the Journal. GM said it would try again with eBay next year. If GM does revive the effort, it will have learned plenty of lessons.

The program allowed people to submit an offer for a car online, and wait for a dealer to respond. But dealers reported that people were sending in ridiculously low bids, and it became a waste of time to try and sort through silly offers that would probably never amount to anything.

One person offered $2,500 for a $40,000 car, the Journal reported.

Which is not to say that there isn't a future for buying cars online. Many buyers have found success shopping for cars on eBay and other sites. But in this economy, and with GM's well-publicized bankruptcy, the conditions were not right for a GM-eBay alliance.

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New 'Trojan' raids bank accounts

Douglas McIntyre — Wed, 30 Sep 2009 10:48:00 GMT

A devilishly clever new Trojan virus that works over the Internet can hack into bank accounts while people are online and take money without being noticed.

According to CNET, the Trojan, dubbed "URLzone," has features "designed to thwart fraud detection systems which are triggered by unusual transactions.”

The new program takes online fraud to a new level. And that should cause significant alarm among consumers. It appears that the experts who create the Trojans have made them so advanced that they will soon be able to get into credit card and brokerage accounts, which could cause a nationwide disruption of the financial system and drive people away from online banking.

Financial firms have counted on increasing numbers of people to use the Internet for their transactions which save the banks money on retail locations and tellers.

One of the questions about the Trojans, of course, is where the money goes after it is stolen. If would seem that government agencies like the FBI could track the trail of money and arrest the thieves. It may not be as easy as that if the capital is being moved around the world, a system that file sharing and other malicious internet criminals have already perfected.

If the URLzone Trojan is the beginning of a wave of new attacks on the e-commerce system the use of the internet could be radically altered and that could affect firms from Amazon (AMZN) to eBay’s (EBAY) PayPal, to Wal-Mart (WMT) to Citigroup (C). Broadband, which was supposed to solve many of the countries problems by bringing information and entertainment into the home and improve business-to-business efficiency may turn out to be the pathway of a real enemy to the credit system.

Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.

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Michael Vick economy rebounds

Minyanville — Fri, 25 Sep 2009 14:42:00 GMT

This article is written by Minyanville's John Kelly

The last time NFL pro bowler Michael Vick played football was in Kansas. Specifically, Leavenworth, Kan., where he was serving a 23-month sentence at the federal penitentiary.

In a scene straight out of "The Longest Yard," Vick, in prison for his involvement in a vicious dog-fighting ring, reportedly played quarterback in jail yard games as a way to kill time and keep in shape. See also, The NFL's Very Own Bernie Madoff.

He'll have an opportunity to finally get back on more familiar turf Sunday, as his new team, the Philadelphia Eagles, hosts the Kansas City Chiefs at Lincoln Financial Field. And with Philadelphia's starting quarterback likely to miss the game due to a rib injury, the possibility of Vick playing is high. The game will attract not only Eagles fans and animal rights activists, but also that part of the sports industry whose main concern is sales.

The questions on everyone’s minds are: Can Michael Vick return at the same level of play after 18 months in jail? Will the fans forgive him for his cruelty to dogs and allow him to refurbish his tarnished image? Gareb Shamus, chief executive of New York-based Wizard Entertainment, which covers the gaming industry, says the answer is yes.

“If anything, it’s his notoriety, more than his athletic ability, that will contribute to a spike in his popularity,” he says. “This is a period in our history where infamy makes you famous. And desirable.”

At the time of his conviction, Vick was the highest paid player in football, with a 10-year, $130 million contract with the Atlanta Falcons that put him at No. 33 on Forbes’ “Top 100 Celebrities” list. But following his 2007 guilty plea in the dog-fighting case, NFL Commissioner Rodger Goodall suspended Vick without pay.

Nike (NKE) also dropped a lucrative sponsorship contract with him and the NFL stopped selling his jersey and other merchandise. These events took a huge hit on Vick’s finances, and while serving his time, he filed for Chapter 11 bankruptcy.

Fast-forward to the present: In August, Vick signed a one-year deal with the Eagles for $1.6 million, with a team option to extend the contract for another year at $5.2 million. The signing has drawn the ire of many, but it’s too soon to tell if his reputation has taken a permanent hit.

At the team’s first home game last Sunday, just 50 people showed up to protest his presence on the team. Several online campaigns have sprung up to urge people to boycott the Eagles' corporate sponsors, which include Canon (CAJ), Budweiser, Gatorade (PEP), MasterCard (MA), Staples (SPLS), and US Airways (LCC). But whether these campaigns succeed in influencing the companies to withdraw their sponsorship of the Eagles remains to be seen.

On the other hand, there’s some positive news for Vick. A day after signing his contract with the Eagles, the video game company Electronic Arts (ERTS) added Vick to this year's edition of "Madden NFL," its bestselling multi-platform video game. (For more on EA, see Rumors About THQ Takeover May Be Right On.)

Even more telling, Vick’s number-seven Eagles jersey is the fourth-best selling jersey on NFLShop.com. The stats are based on sales at the site from April 1 to August 28; Vick signed with the Eagles on August 13, which means that his jersey broke the top five in sales in less than two weeks. And while Dick's Sporting Goods, whose headquarters are in Pennsylvania, is refusing to stock the jersey, the sporting goods chain Modell’s reports that demand for the jersey is high.

Does this mean that Vick can put the past two years to rest? Some crafty entrepreneurs are betting against it. Among the items currently up for sale on eBay (EBAY) are t-shirts with the slogan “Vick’s an Eagle, Hide your Beagle.” On the gaming website y8.com, you can download the "Michael Vick Dog Fight Game," which describes itself as a game in which “Vick tries to hide his dogs from the police. The dogs try to taste his delicious flesh. My money's on the dogs.” If inclined, one could also purchase a Vick Dog Chew Toy, made of “state of the art dog material” for $15.95 (with free shipping). It also comes in a limited Prison Edition.

But perhaps the most interesting Vick-related item is no longer for sale; at the start of the 2009 NFL season, for $39.99 on NFLShop.com, shoppers could purchase an Eagles jersey customized with Vick’s name and number on its back that was created as an item for one particular niche demographic: dogs.

No positions in stocks mentioned.

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EBay's run on luxury

Minyanville — Thu, 03 Sep 2009 11:58:00 GMT

This article is written by Minyanville's Tal Pinchevsky

Even eBay (EBAY) itself might admit that the summer of 2009 has been a difficult one. Its sale of 65% of Skype for $1.9 billion was a disappointing end to what was supposed to be a major, if puzzling, acquisition.

And the company’s stock immediately took a hit on the heels of Walmart (WMT) announcing a new third-party retail site that could cut into eBay’s market share. It all brought an unceremonious end to what was supposed to be a historic anniversary for an industry trailblazer.

Bing: How to use Skype

Since being founded in 1995, eBay has become an undisputed monster in an online marketplace that has seen plenty of high-profile Web brands come and go. That’s not bad, considering founder Pierre Omidyar built the site to assist his wife with her growing collection of Pez dispensers. But the real beginning of eBay as we know it began exactly a decade ago with the first few steps in what would become a sprawling global expansion.

Ten years ago this summer, eBay launched its British and German sites, which have since gone on to become among the company’s most-active national sites. It went on to launch in dozens more countries and, between 2003 and 2005, the company launched important sites in China and India, making it the world’s largest online marketplace.

With billions of transactions over the years and new sales taking place every minute, eBay used to be known as an online garage sale for fringe and unwanted items. But with the recent downturn in the luxury market, eBay has increasingly become a go-to marketplace for those willing to make serious investments online, filling a niche that rivals like Amazon (AMZN), and especially WalMart, haven’t.

With listings for high-end cars, airplanes, antiquities, and jewelry, eBay has unexpectedly become the online home to some of the world’s richest price tags. One auction is currently accepting bids for a $4.8 million water park in Cuernavaca, Mexico. The Texas-based seller claims he is open to trades and requests “only interested buyers please.”

Demonstrating eBay’s evolution from collectibles to convertibles, here is a slideshow of some of the priciest items ever sold on the site.

No positions in stocks mentioned

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EBay finally offloads Skype

Kim Peterson — Tue, 01 Sep 2009 15:33:00 GMT

EBay (EBAY) has finally found a buyer for Skype, the Internet calling service that it bought four years ago for $2.6 billion.

Skype was a bizarre acquisition for eBay that never made sense. The auction company had hoped that buyers and sellers would use Skype to talk to each other for free. It would create a new level of communication and revolutionize the site.

That didn't happen. Instead, Skype became a darling among international callers. Two people using Skype could talk for free, even internationally. Skype also had low rates for calling regular phones. Suddenly, daily calls to family in India or Germany became a reality for many.

Bing: More on Skype

So that left eBay in a bit of a bind. Yes, Skype had potential. Skype had loyal fans. And it was a good product. But it was never well suited for eBay's transactional business model. What to do with this budding star?

EBay initially planned a Skype initial public offering in 2010. But that idea stalled under legal wrangling between eBay and Skype's founders, and ensuing lawsuits were going to tie up Skype in the courts for years.

So eBay found the next best alternative: Selling Skype to a group of private investors. EBay will get $1.9 billion in cash and a $125 million note, and it keeps a 35% stake in Skype, the Associated Press reports.

That's not a good return on its investment, and shareholders will be disappointed. But at least eBay gets to say goodbye to the child it never had enough time for or interest in, while still retaining a stake in its success. And the legal issues with Skype's founders will presumably be someone else's headache now.

So eBay can now focus on its core business of auctions and, increasingly, fixed "buy it now" prices. It has loads of problems on that side: Users are still irate with increased fees, buyers and sellers don't trust each other, and the overall Web site feels antiquated and poorly done.

Plenty to focus on there. So I think it's great that eBay found a willing buyer and didn't get too hosed on the deal. Skype goes to a better place and eBay can spend more time improving itself.

At the time of this writing, Kim Peterson owned shares of eBay in personal or client portfolios.

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California unloads on eBay

Kim Peterson — Wed, 26 Aug 2009 17:44:00 GMT

How bad are times for California? So bad that Gov. Arnold Schwarzenegger is now autographing used cars to sell online.

Oh yes, it has come to this. The state, in desperate need of cash, is cleaning out its storage and putting items up for sale on eBay (EBAY), Craigslist and other places, The Los Angeles Times reports. And with a signature from the Governator, maybe those things will bring in a little more cash.

A 2002 gold Ford Focus with some 108,000 miles on it, for example, had Schwarzenegger's autograph on the visor and was going for $2,125 on eBay. The state will hold a two-day auction for other items starting Friday in Sacramento.

There are other deals to be had, the Times reports. Some are unclaimed items, or stuff that has been confiscated by law enforcement. A 10-carat gold ring. Earrings. On Craigslist, seven wood coat racks going for $5 each.

You can read more about the "Great California Garage Sale" by clicking on the state's site here. And the items on eBay are listed right here.

I might be persuaded to buy this $30 office desk if Schwarzenegger personally carried it into my house and repainted it. And the way things are going, he just might agree to do to that.

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Media mogul Murdoch’s yacht up for rent

Minyanville — Thu, 13 Aug 2009 15:27:00 GMT

This article was written by Minyanville's Scott Reeves

If your nautical experience is limited to the Staten Island Ferry, here’s a chance to broaden your horizons: Rent Rupert Murdoch’s 183-foot sailboat.

Gawker says the Rosehearty -- not to be confused with the "Citizen Kane" Rosebud -- can be yours for a mere $310,000 per week.

The sailboat has an aluminum hull -- a downer for traditionalists. But the “stunning” interior is the work of French designer Christian Liagre. On the other hand, do you want to be seen floating around in something designed by the folks who gave us the Maginot Line and Le Car?

Bing: Rupert Murdoch

Renting the boat would be strictly business and wouldn’t get you entrée to Page Six, the New York Post’s famous (and must-read) gossip page. But there might be a few back issues of The Poopsheet of Record lying around for your edification.

Rupert’s splendiferous boat comes with 3 white sails and opens up other out-of-this-world possibilities. How ‘bout renting a sports hero’s persona? It might be possible. There’s no guarantee the babes will follow, but it probably beats life under fluorescent lights in a cubicle.

If you’re uncertain what renting Rupert’s boat gets you other than $310,000 poorer, and you need to stay within budget, try RentAnything.com. Oh wait, the link takes you to “the fastest way to connect the people, companies and the capital of Silicon Valley” -- not a cheap-o tour of the Velvet Underground. Damn!

Zilok might be a better bet for members of the proletariat. After the usual garden tools, party stuff, sporting equipment, and computers, it turns out you can rent works of art, including paintings, sculptures, and bronzes. Alas, no tapestries are listed, so you’ll just have to live with those stains of uncertain origin on the living room wall.

Zilok bills itself as “peer-to-peer” rentals, a variation on eBay’s (EBAY) killer theme. No toothpicks are available today, but that Ford (F) F-150 pickup truck you’ve been dreaming about can be yours for $50 a day.

Somehow, a battered pickup lacks the emotional snap of Murdoch’s yacht with 5 suites and room for up to 10 guests. Better grab that tub now.

And as long as you’re up, Rupert, peel me a grape.

For more on the outlandish lifestyles of corporate executives, see Eight Lifestyles of the Rich and Incompetent

No positions in stocks mentioned

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GM tests eBay sales

Kim Peterson — Tue, 11 Aug 2009 17:15:00 GMT

Things are so bad for General Motors that the automaker is now selling cars on eBay (EBAY).

Actually, it's not the worst idea. People can buy GM cars and trucks from some 225 California dealers at this eBay site starting Tuesday, according to Bloomberg.

It's a desperate attempt by GM to find more sales channels as it cuts the number of its dealerships by 42%. GM is selling new Chevrolet, Pontiac, Buick and GMC cars, and buyers can accept the "buy it now" price or make a lower offer, which starts an online negotiation. After a car is sold, a California dealer will contact the buyer to arrange financing and delivery.

Bing: More about General Motors

The move could be aimed at bolstering GM sales in California, where its market share is only about 13.5% (the national average is 19%). GM says it chose California because the state has been so damaged by the recession, Bloomberg reports.

EBay will get a fee from each sale, though the company wouldn't say how much. The auction site generally gets $125 for used-car transactions.

So what are cars going for on the site? I did a quick search Tuesday and found these offers:

A 2009 GMC Yukon hybrid SUV: Buy-it-now price of $52,108

A 2009 Buick Lucerne CXL (pictured): Buy-it-now price of $33,297

A 2009 Chevrolet Corvette: Buy-it-now price of $49,514

A 2009 Pontiac G5: Buy-it-now price of $14,915

At the time of this writing, Kim Peterson owned shares of eBay in personal or client portfolios.

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Mercadolibre - The eBay of Latin America

Andrew Horowitz — Tue, 04 Aug 2009 19:02:00 GMT

Looking for an interesting opportunity, we came upon MercadoLibre, a company which provides emerging market exposure as well as a technology edge. Think of it as the eBay of Latin America which may hold opportunity as it expands further in the region.

Description

MercadoLibre (MELI) operates an online trading site for the Latin American markets. The company's Web site allows businesses and individuals to list items and conduct sales and purchases online in either a fixed-price or auction format. MercadoLibre offers classified advertisements for motor vehicles, vessels, aircraft, real estate and services, and offers online payment services. MELI is a Latin version of eBay (EBAY). The difference is that this company has a much better outlook and it is in the initial growth phase. So, we may think of it as a young eBay before it got caught up in Skype, PayPal and other bureaucratic red tape.

Points to consider

Here are some of the fundamentals and a few comparisons to eBay and Amazon (AMZN).

Year over year sales growth: 18.48% ( ebay -1.8%, Amazon 19.79%)
Revenue Growth 1 year: 60.96% (eBay 11.33%, Amazon 29.19%)
Market Cap: $1.25 billion
EPS Growth 1 year: 95.45%
P/E Ratio: 54.06 (average Peers - 39.24)
ROE: 23.28% ( Average of Peers - 1.85%)

There are several other factors on a fundamental basis that make us take notice of this company. The operating margin comes in at a whopping 28%, second only to Google (GOOG) in its peer group. Also the gross margin comes in at the top of the group at 79.9%. This is good as they have much more room to cut expenses and keep the bottom line profitable.

Valuation

On a valuation basis, using a standard discount model, the price target is $38.80. Discounting that for a high PEG ratio (1.4), we could consider a target of $32-$35 without considering any significant growth drivers. Out of 9 analysts, the most recent changes to the outlook have all been to outperform or overweight. Those that last did their updates back in May or earlier have underweight recommendations and low price targets. Most of the recent price targets range from $29-$32.

Technicals

We believe that if the stock gains momentum and passes through the $31 barrier, it could move higher toward $37 before taking a pause. Notice the similarities to mid-June's technical indicators. Also, look how the price has been riding the 20-day SMA.

(Click chart to enlarge)

Short Interest

Short interest shares are now at 5.1 million with a short interest ratio of 10.71. With earnings coming late next week (AUG 5th), if MELI beats estimates of $0.11 for the quarter on revenues of only $39 million, then we could see a significant pop in share price.

Geography

Below is a chart that shows the geographic data of revenues and sales. While Brazil had been a big part of the revenue for MELI, they are moving into other Latin American countries muy rapido.

(Click chart to enlarge)

Earnings

In the past, there has been a nice move higher into earnings by about 6% from the 5th day before until the day before. MELI has usually beat the analysts estimate with a surprise ranging from 153% in the 12/08-2/09 period to a miss of 50% for the 3/08-5/08 quarter. Earnings have been growing nicely and even as the P/E is hot, it has come down from a high of 321 back in 2007. This is a growth story that could benefit from the growth of the Latin American online community.

Risk

MELI is a volatile stock and has shown to have some big swings. We are keeping the position to a reasonable level that we will look to hold to a 10% stop loss. Earnings are around the corner. If we see that the company is able to beat both top and bottom, we will consider adding to the position to bring it to a 2.5% overall portfolio position. The chart above shows a good pattern, but could also be looked at as a potential breakdown. Therefore, while we like the fundamentals and peer comparisons, stocks that are part of the emerging Latin markets may have a higher beta and higher risk. We will watch the position and adjust accordingly.

Related Reading

Note: Earnings are due out 8/5/09 after hours...

Disclosure; Horowitz & Company clients may own positions in the stocks mentioned as of the publish date.

Andrew Horowitz is a money manager and the founder of Horowitz & Company. He is also the author of the bestselling book, The Disciplined Investor . Check out his latest investment idea or listen in as he hosts, The Disciplined Investor Podcast.and his new podcast The Winning Investor: Quick and Dirty Tips for Beating the Market.

EBay plans IPO for Skype, its biggest mistake

Kim Peterson — Tue, 14 Apr 2009 21:01:00 GMT

EBay (EBAY) is finally getting rid of Skype, its worst acquisition ever. The auction house paid $2.6 billion for the online calling service in 2005, but was never able to integrate it well. So eBay wants to spin it off through an IPO next year.

Executives thought Skype would boost sales by allowing buyers and sellers to talk to each other online. That never happened, and Skype became an expensive mistake that eBay pretty much left alone. Yet the service still grew, and is loved by many -- particularly for international calling.

But it doesn't make much money. Skype only brought eBay $145 million in revenue in the fourth quarter. And while it is profitable, it generates thin margins. Analysts think Skype only added about 3% to eBay's operating margins last year. Those numbers could be worse this year, as Skype meets its fiercest competitor yet: Google (GOOG).

So why an IPO? EBay chief executive John Donahoe says Skype has "limited synergies" with the company. A spinoff, he figures, will allow eBay to focus on the basics of e-commerce and online payments (through its PayPal unit).

The IPO isn't planned until next year, and only then if market conditions allow. I suspect that eBay was not successful in trying to sell Skype, and is hoping for the best with an IPO.

Who would buy Skype, anyway? And for that matter, who would invest in an IPO? The profits just aren't attractive enough, and the competition is too strong.

I say that presuming that Google Voice is everything its cracked up to be. Google's new product, expected soon, offers free long-distance calling from your regular phone. Not from a computer, like Skype does (although Skype works with certain phone models).

If you have a phone line, you can call into Google's voice mail system and push a button to connect to a new dial tone. From there, you can make long-distance calls for free. International calling costs pennies a minute.

If Google can do this (and other companies will likely follow as well), why would you need Skype? In this scenario, Skype would have to focus more heavily on international growth.

At any rate, it's good to see eBay trying to offload Skype. But before an IPO can have any chance of success, eBay needs to clearly lay out exactly how this company can scale and generate more profits, and how it can take on the likes of Google Voice and expect to come out on top. As it stands now, I just can't see it.

Related reading:

EBay, will you sell Skype already?

Why eBay offers cheap long-distance calling

Skype loses steam as eBay boots CEO

Free long-distance? Oh yeah, Google's going there