eBay To Bounce Back: Rejuvenate,Reform and Spell Resilience

Must Read

WhatsApp Might Lose 60 Million Indian Users Post Updated Policy Changes, New Survey Reveals!

The Facebook-owned instant messaging platform’s decision to update their privacy and terms of service brought about a...

Uber and Ola In Hot Water: India Authorities Launch Fresh Probe!

The Directorate General of Goods and Services Tax Intelligence (DGGI) sent a summons to Uber and Ola...

Happy B’Day Gordon Moore: One Of The Founding Fathers Of Silicon Valley

Gordon Earle Moore co-founded the paramount Intel Corporation (NASDAQ: INTC) with Robert Noyce in July 1968, which is worth $204.16...

The internet giant eBay Inc. [NASDAQ:EBAY] has played a vital role in the growth of the global ecommerce market. For over two decades, as a true marketplace, eBay has been connecting buyers and sellers directly. However, with the strengthening presence of Amazon, Alibaba and many other homegrown players in developing markets like India, eBay is finding tough to stay afloat.

The once dominant player of the global eCommerce market finally finds time to sculpt its various parameters in accordance with the market strategy.

eBay, which was infamously spreading like an addiction in the US in 1999, has been finding it tough to deal with the growing competition. From being a leading online marketplace, connecting buyers and sellers, to offering deals eBay has been on a roller coaster ride.

Advertisements

eBay’s share price had touched $24.5 during its peak time in 2004, but came down crashing to mere $4.57 in Feb 2009. Between 2005 and 2007 the company lost almost $30 billion in its market cap. The valuation of Skype, the company acquired by eBay in 2005 for $2.5 billion, tumbled to half in 2007. Amazon and Alibaba kept growing at the cost of eBay and all strategies employed by eBay, kept failing one after another.

However, eBay’s $50 billion turnaround of eBay in the following five years is an interesting case study worth reading time.

Glaring notice on New year’s Gaze!

A year back the share value of eBay reached an all-time high, touching $45. But the market scenario changed fast for eBay as other eCommerce players continued luring online shoppers and the brand eBay started fading out. The company failed to capitalise and soon the share came down crashing to nearly half by the end of December 2018.

Indeed, it was a warning bell for Elliott and he came heavily on eBay, criticising its employed policies and strategies then.

The New Year’s gaze thrilled eBay with a glaring notice from its influential investor Elliott Management stipulating a five-pointer action plan. 

Advertisements

The red-hot notice rebuke the veteran in ecommerce player that it has been washed out completely in the last year losing 20% value in the equity market. And retrogression of the overall market performance is about –35% to -60% comparatively to its rival industry competitors.

Elliott suggested that eBay’s marketplace is its utmost core strength and make efforts to empower them.

“Despite its remarkable history as one of the world’s largest e-commerce platforms, eBay as a public-company investment has underperformed both its peers and the market for a prolonged period of time.” as quoted in the ELLIOTT Management’s Fiery Notice!.

As a piece of stringent advice from its substantial investor eBay has appointed two new independent board of directors, Jesse Cohn from Elliott Management and Matt Murphy from Marvell Technology, as the company starts to streamline its rejuvenation techniques.

eBay got pushed to scrape off its subsidiaries

With the appointment of new directors, eBay is off to a whole new start apparently. Elliott, run by billionaire Paul Singer, has proposed five point strategy to help eBay win back lost ground. One of the strategies is to sell off its cheering subsidiaries StubHub and ebay Classifieds as a major scrap off.

“We all share common ground: we see tremendous opportunity ahead and want to see EBay’s full potential realized over the long-term,” eBay Chief Executive Officer Devin Wenig said. “The initiatives we are announcing today are the result of this constructive dialogue.” as reported in the Bloomberg Quint.

It is expected that eBay’s stake prices would be hovering $60, if the good old auction-web company follows Elliott Management’s quality proposals.

eBay has also taken various other measures to boost the confidence of its investors, stakeholders and employees. The company has unleashed the maiden dividend scheme for its shareholders and assured to pay back over $7 billion in capital within two years of time span. The company is also slicing off 135 jobs as a fat cut and reorganizing its regional leadership team in one single global team.

In the past three years, the inventories of eBay have soared up to 1.2 billion up from 850 million. Additionally, 20 million new customers were sourced to enhance the customer base to 179 million on the whole.

Once again, eBay is all set to bounce back with the new strategy as a result of all the criticism Elliott posed. Revamping its strategic reviews and counting on the various sensitive market is one of the major strategies eBay is banking upon.

For eBay it is just a storm to pass by. There would always be calm after the storm. So, all we need to do is just sit back and watch the game of the veteran who probably knows the industry better than anyone else.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Snapchat Spotlight: A New Way for Creators to Earn Money

Short-form video applications have increased overwhelmingly in popularity in recent times. The surge in this format of...

COVID-19 Unemployment Leading To Ageing Indian Workforce, CMIE Reports

The latest data shared by the CMIE aka Centre for Monitoring Indian Economy has highlighted a huge red flag.

The Slip-Ups Keep On Coming: WhatsApp Web Users’ Mobile Data Leaked On Google

As the developments have unfolded over the past week, the clock for WhatsApp seems to be ticking with every passing minute and...

Trump Administration Has Landed Its Final Blow On Chinese Companies: Xiaomi Blacklisted!

In its recent move to safeguard national security, the United States’ Trump Administration has decided to go after China’s second-biggest smartphone marker...

Huawei Is Gunning For Acquiring A Fifth Of Android’s Userbase With Its Own HarmonyOS!

After Google’s ban on Huawei in 2019, the Chinese-origin tech company is all set to roll out HarmonyOS later in 2021 as...

Battle Lines Are Drawn: Qualcomm’s Latest Acquisition to Challenge Apple, Intel

The quest to gain supremacy creates a butterfly effect for sure. With the challengers and the champion pulling out all stops to...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This