eBay Inc (NASDAQ:EBAY) has hit a wall and its fundamentals are deteriorating, RBC Capital Markets Managing Director Mark Mahaney told Cory Johnson in an interview on Bloomberg West.
The comment comes as eBay Inc is getting more scrutiny as it plans to spin off its PayPal division this year. The company also just reported 4Q2014 results which saw the company’s revenue increase 9% year-over-year to $4.9 billion. Still, experts say sentiment about the company is not too good which is in line with what Mahaney told Johnson.
“There was a heck of a lot of noise out of eBay this quarter and I think the stock is now working off corporate catalyst not fundamental catalyst because the fundamentals are deteriorating,” Mahaney said.
According to Mahaney, eBay Inc has been upfront about its fundamentals deteriorating because it’s easy to be upfront about what would normally be a sensitive admission such as this when the market is focused on corporate catalyst.
“This was a turnaround story. John Donahoe led a really successful consumer pivot at eBay. EBay was materially underperforming e-commerce growth rates three, four, five, years ago. He came in, turned it around, brought it right back up growing in line roughly with e-commerce the last two years and this year they hit a wall,” Mahaney added.
RBC Capital Markets thinks that eBay Inc has finally run out of low-hanging fruits to pick and the dual threat of Alibaba Group Holding Ltd (NYSE:BABA) in the international markets and Amazon.com, Inc. (NASDAQ:AMZN) in the domestic U.S. market has put considerable pressure on eBay.
John Donahoe, the company’s current CEO, will leave after a shakeup partly cause by the spinoff of PayPal which activist investor Carl Icahn has been really pushing for.
Jeffrey Tannenbaum’s Fir Tree owned about 5.75 million eBay Inc shares by the end of the third quarter of 2014.
