eBay Inc. (NASDAQ:EBAY) closed at $106.05 on September 30, more than 16% higher than a year ago. The company is worth roughly $48.5 billion, turns 21.57% of its $12.01 billion in revenue into operating profit, and returns 46.61% on equity.
Those are not the numbers of a business Amazon destroyed, which is the assumption most people still carry.
eBay Owns the Categories a Warehouse Cannot Handle:
eBay survived by retreating into the categories a logistics company cannot serve well. Amazon’s catalog is built around standardized products moved at speed. It has not pursued one-of-a-kind listings with anything like the scale eBay has.
So eBay concentrates on used goods and collectibles, from car parts to trading cards and watches. Each category has buyers who know exactly what they want, and sellers with nowhere else of comparable scale to reach them.
That combination is unusual. Most marketplaces compete on price or delivery speed, and eBay competes on whether the item exists at all.
Authentication turned that into something firmer. By verifying expensive items itself before they reach the buyer, eBay addressed the trust problem that limits high-value second-hand trade. Amazon has not built an equivalent service across those categories.
The results have followed. Revenue grew 14.8% last quarter, and earnings rose 51.1% in the same period, though that second figure reflects the comparison quarter as much as current trading.
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Sellers of Used Goods Have More Places to Go Every Year:
The weakness in a network moat is that it can thin without breaking. Sellers of used goods have more choices now than they did. Social platforms carry listings, and specialist marketplaces have taken individual categories. Every seller who leaves makes eBay slightly less complete for buyers, and completeness is what brings buyers back.
eBay has not ignored that. It completed the purchase of Depop from Etsy in July. Buying a fashion resale marketplace acquires a category rather than competing for it. Acquiring specialist rivals works while they are still small enough to buy.
People come to eBay because it has everything. A marketplace that is merely good at several categories is a much weaker business than one that is the default across all of them.
This kind of decline does not show up in a single quarter. The company’s reported buyer and seller counts do not yet show it happening at all.
Conclusion:
Authentication is what changed eBay’s position, because it addressed the one thing stopping buyers from spending heavily on second-hand goods, and Amazon has shown no interest in items that do not fit a warehouse. Set against that is a weakness particular to marketplaces. They only work while both sides keep arriving; sellers have more alternatives every year, and that kind of thinning stays invisible until it is well advanced. The stock no longer carries the discount it did when investors assumed the business was finished, so the recovery is priced in rather than ahead of itself.
Market Sentiment:
eBay Inc. was held by 52 hedge funds with a combined stake value of about $1.4 billion at the end of Q2 2026 in the Insider Monkey database. This is down from 61 hedge fund holders with a cumulative investment value of around $1.8 billion in the previous quarter.
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This article is originally published at Insider Monkey.
