eBay - Superb Internet Business Model Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : eBay - Superb Internet Business Model

EBAY 84.32

+2.0%

10:55 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: gizelle otero who wrote (4861)	8/14/1999 2:43:00 AM
From: paulmcg0	Read Replies (1) of 7772

Your estimates for EBAY are misleading. "4. eBAY earned 500% more in the last quarter than the one before." I think you are talking about the first quarter of this year vs. the last quarter of 1998 according to the research data (see financialweb.com ) . The number is actually 400% because the formula is 100% * (new value - old value) / (old value). In this case 5 cents a share vs. 1 cent per share in earnings or 100% * (0.05 - 0.01) / (0.01) = 400%. I noticed you didn't mention the quarter that ended in June, where eBay's earnings actually dropped to 3 cents a share. So, let's use the analysts' estimate of 11 cents a share total earnings for eBay in 1999, versus 1998 total earnings per share of 2 cents. Wow! ET phone home! eBay will make 11 cents a share in 1999, which makes the P/E ratio how much? Even if they doubled the analysts expectations, at its current stock price, annual earnings of 22 cents a share would be nothing to get excited about. Using our handy formula from above gives us a 450% increase in projected earnings for 1999 compared to 1998. This is certainly not the "best of all possible worlds" (an oblique reference to Voltaire) and I challenge you to name a company that has had 450% earnings increases for several years running. You are also completely ignoring the possibilities of competition, increased costs such as those for marketing or capital expenditures for hardware and software, and a saturated market (not everybody will be using eBay). Or, by some chance do you think that poor people, say in Bangladesh, will get PCs, go on the Internet, and increase the customer base of eBay?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next