eBay INC 2012 4th Quarter Earnings Call Numbers Of Interest To Small Business Sellers

eBay INC 2012 4th Quarter Earnings Call Numbers Of Interest To Small Business Sellers
18 January 2012
EventHorizon1984

 

eBay INC CEO John J. Donahoe said during the Fourth Quarter Earnings Call, "“We had a strong fourth quarter finish to an excellent year, increasing our confidence in our three-year outlook."  Meanwhile Deutsche Bank analyst Jeetil Patel said, "sell."  Fodder for thought if you live and die by eBay INC stock fluctuations.  Whereas small businesses on eBay are more concerned with, 'How did the Marketplaces section of eBay.com do?'.

Well.                                  

Numbers from eBay's 01/17/2012 SEC 8-K filing show a healthy net total Marketplaces quarter to quarter revenue growth of 7%.  Up from the previous quarter growth of "0%".  It is also a slight improvement over the fourth quarter 2010 growth of 6%.

Edgar Online - eBay Inc - 8-K - 01/18/2012

Marketplace revenues are principally generated through fees paid by users of eBay.com.  The payees being the business who use eBay.com to sell products.

How many products were there during the fourth quarter?.

According to Medved.net eBay started the fouth quarter with approximately 154 million listings per day. 

Auction chart from Medved.net.

Auction chart from Medved.net.

The count peaked at 177 million.  The fourth quarter ended with approximately 162 million products.

If you were selling on eBay.com, were you using PayPal?

Edgar Online - eBay Inc - 8-K - 01/18/2012

The number of PayPal payments made increased a robust "19%", compared to the previous quarter's increase of "6%."  It is also a tiny improvement over the fourth quarter 2010 growth of 18%.

PayPal payment volume was up "14%", compared to third quarter's anemic "2%" increase.  However it is well below the fourth quarter growth of 20%.

According to eBay INC, the "Take rate" declined for the first time in 2011.  The fourth quarter "Take rate", that is the percentage of a PayPal transaction that Ebay INC keeps, stands at "3.71%."  Down from the previous quarter amount of "3.78%"

What about eBay INC's Bill Me Later payment method? 

eBay INC reports Bill Me Later losses increased and decreased and.  The Net charge-off rate, losses, increased slightly to "4.4" from the second quarter's "4.3%."  However the 90-day delinquency rate decreased to "2.4%", compared to the previous quarter's "2.6%."

Once again eBay's payment transaction losses remaining more or less stable.  It still remains to be seen why eBay INC continues to increase the amount of funds held from eBay's customers.  Going from 2010 fourth quarter's $2,550,731,000 to this quarter's $3,967,550,000.  Nearly four billion being held, versus the previous quarter's $3,295,115,000.

What about the merchandise selection on eBay.com? 

Edgar Online - eBay Inc - 8-K - 01/18/2012

eBay INC states Gross Merchandising Volume (GMV) represents the "Total value of all successfully closed items between users on eBay Marketplaces trading platforms during the quarrter, regardless of whether the buyer and seller actually consummated the transaction."

Four quarter being essentially the Christmas shopping season, GMV quarter to quarter growth increased a healthy "12%". A definite improvement from the the rest of the year's growth numbers of "0%", "1%", and "-4%".  But that "12%" is poor in comparison to the fourth quarter 2010 growth of "19%".

Remember last quarter John Donahoe touted a GMV increase of 16%?  Christmas shopping season is the biggest boost to commerce's bottom line.  Fourth quarter should have buried that "16%".  However fourth quarter pulled in a year to year increase of only "10%."  A significant decrease compared to the previous quarter's "16%" and "17%".

The GMV for vehicles was a dismal decrease of "-13%" quarter to quarter.  A significant fall from the "-4%" decrease of the second quarter.  Year to year Vehicle GMV growth was a decrease of "-3%".  eBay INC's vehicle market is dying.  Why eBay INC allows this degradation to continue is unknown.

"E-Commerce up > 23%!!"

John Donahoe became eBay INC CEO in March 2008, and will finish his fourth year of CEO stewardship in March 2012.  What is the stock trader's view?

At the start of John Donahoe's tenure, eBay INC's stock price was 29.84 (31 March 2008).  At the end of the trading day, eBay INC closed at 30.34. 

Trading today was frantic.  Total shares traded stood at 31,514,297, versus the average daily transaction volume of 10,863,900 shares.  Dropping eBay INC's stock price from 30.53 to 30.34.  The after hours price, that is transactions made after the Earnings Call, stands at 31.05.

eBay INC's official investor page, in the matter of eBay INC stock dividends declares:

Which means the average individual investor must 'buy low' and 'sell high' to materially profit from eBay INC stock.  Such an investor who bought on 31 March 2008 and sold today would have made fifty cents per share ($30.34 - $29.84).

Less transaction fees of course.

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