EBay shares drop following earnings report Results beat estimates, but Wall Street worried about slowing business By Dan Gallagher, MarketWatch Last Update: 2:37 PM ET Oct 18, 2007 NEW YORK (MarketWatch) -- Shares of eBay Inc. slid more than 6% Thursday amid worries on Wall Street that the company's core online auction business is slowing. Late Wednesday, eBay (EBAY) reported results for the third quarter. The company swung to a loss due to a large write-off of its investment into Internet telephony carrier Skype, but the results excluding the charge came in well above analysts expectations for the period. However, the company also warned that it planned to step up spending in the next year, and that it would cut listing fees for the up-coming holiday season in an effort to stimulate growth in auction listings. Shares of eBay, which had jumped more than 20% in the last six weeks, were trading down $2.57 at $38.03 by late afternoon Thursday. "We think eBay is facing a worst-case scenario in its business, due to 2% transaction volume growth (and potentially declining soon), user dis-engagement, higher ad costs, declining purchase frequency, rising seller costs and operating margin pressures," said Jeetil Patel of Deutsche Bank in a report, in which he cut his rating on eBay shares to sell from hold. |
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