eBay before the bell: buying opportunity?

Posted Apr 27th 2006 8:16AM by Sarah Gilbert
Filed under: Before the Bell, eBay (EBAY)

With eBay's stock price under $35 and only a few dollars from its 52-week low ($31.20 on April 27, 2005 ... if you're counting), it could be a good deal. Do I hear the words, "buying opportunity"? It's definitely been selling these past few days, with volume more than 50% higher than average and prices slowly falling. At just over 45 times, the company's P/E ratio is pretty high. But it's been way higher and it's no less of a great company than it was two years ago.

It seems that, every day, more people use Paypal and Skype, and someone else tells me they'll check for a skein of handpainted yarn or a used cell phone on eBay instead of buying it IRL. Who wants to get in the car and go shopping, after all? (Not to mention: you'll save gas. Always a good thing.)

There are always two questions I ask when I'm thinking about the future prospects of a stock; one is am I spending my own money there? and the second is, do I believe in the management team? The answer to both questions, for me, is still "yes." I think I'd wait until eBay dips a bit lower, but under $35 is definitely a sweet spot for me.

Tags: buying opportunity, BuyingOpportunity, ebay, sweet spot, SweetSpot

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Reader Comments (Page 1 of 1)

4-27-2006 @ 8:59AM

Rick Hoffman said...

It appears that there has been an exit of some institutional ownership and also pressure for option automatic sales by executives. most important though, is the obvious amount of block short selling. I belive that your take on the value of the stock, considering the current retailing environment is totally correct. so,I am a buyer this morning, and will love to se the probable short squeeze that will be in the near future