Stocks: (EBAY)(GOOG)
It is no secret that this is a good holiday season for online shopping. E-commerce sales are up about 24% through the first month of the period. And, EBay has been up a little bit on the news. Progress at EBay is beginning to earn its some accolades from Wall St. But, the stock, trading at $32, is still well off its 52-week high of $47.86. In December 2004, the stock was at $59. Even some new believers in the investment community, a haircut of nearly 50% is a lot.
The purchase of Skype is still a mystery, but EBay’s other businesses are doing well, very well. PayPal was a big part of last quarter’s earnings. According to Morningstar, even with 120 million accounts, the market for PayPal is 10x that size. Companies like Dell and Barnes & Noble alread use it and the threat from Google CheckOut has not materialized.
It is easy to forget that no other auction site has anywhere close to EBay’s membership. The fear that raising prices would drive traffic away appears to have been baseless. And, the company continues its expansion overseas.
According to Yahoo!Finance, the price target for EBay’s shares is as high as $45 among the 19 analysts listed by Thomson/First Call as covering the company. And, that would not even take it back to its 12-month high.
Happy holidays, EBay
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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