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Technology Stocks : eBay - Superb Internet Business Model
EBAY 83.82+3.7%Nov 7 9:30 AM EST
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To: Bengrahamman who wrote (7316)11/17/2004 3:26:35 PM
From: geoffrey Wren  Read Replies (1) of 7772
 
That's a lot of information on Ebay. I would never buy the stock, but shorting this stock is dangerous. Here are some points long and short.

Additional points against Ebay.
1. Article in WSJ recently about how Best Buy is trying to find ways to stop purchases by unprofitable patrons. What has happened is that a lot of ebay sellers run into Best Buy and other places and buy up the specials to sell on Ebay. The bricks and mortar places are not going to sit back and subsidize Ebay forever. They will fight back somehow.

2. Sellers on Ebay are getting tired of Paypal and its fees. A lot of them are insisting on Bid pay and won't use Pay Pal. Pay Pal does charge too much.

3. Advantages to buying on Ebay are diminishing. If you look for instance at a Nikon 3200 camera, you can buy it cheaper from Internet stores than from the Ebay market. However, this is not true uniformly. You can buy a Citizen Eco watch much cheaper on Ebay than from stores.

4. There is extensive fraud in the ancient coin section of Ebay. Ebay does little to cure this problem. Over time more publicity about the risks of buying on Ebay will get out.

5. And of course there is the whole valuation issue. Ebay is ridiculously valued.

Points in favor of Ebay.

1. They are getting into Craig's list. Sooner or later they will have neighborhood systems running and charging fees. There is real demand for such a system and could greatly extend the reach of Ebay.

2. No one has been able to compete with them.
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