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Ebay Weighs Selling Off Businesses After Pressure From Activist Investors (cnn.com)
Ebay may be paving the way to auction off some of its businesses. The e-commerce company said Friday that it is initiating a strategic review of its assets, including ticket sales site StubHub and the Classifieds Group, after facing pressure from activist investors to spin off or sell these properties. From a report: Ebay is also adding two directors to its board, including Jesse Cohn of Elliott Management, a hedge fund that disclosed a 4% stake in the company in January and began agitating for change.
Devin Wenig, Ebay's president and CEO, said in a statement Friday that these moves are the result of "two months" of dialogue between the company and investors. "The bottom line is that we all share common ground: We see tremendous opportunity ahead and want to see Ebay's full potential realized over the long-term," Wenig said. Last month, eBay announced a restructuring that would bring various regional marketplace units under one global leadership team.
"Activists" Investors is a loaded term that leads you to think of SJW idiots wanting some kind of SJW actions.
What it appears to be is simply investors suggesting that eBay focus on its core business and ditch distractions.
The eBay site is old, out dated, confusing and cluttered.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
"Activists" Investors is a loaded term that leads you to think of SJW idiots wanting some kind of SJW actions.
Sometimes but most of the time the term simply refers to some greedy corporate raider trying to squeeze the company in such a way that it pumps up the stock price regardless of the long term benefit to the company.
What it appears to be is simply investors suggesting that eBay focus on its core business and ditch distractions.
Possible but doubtful. Usually the argument goes something like saying the company would be worth more split up than it is as a single unit. Frequently this argument is used against conglomerates. This argument is sometimes correct but it tends to get over used and it's not at all clear if it applies here. Wouldn't surprise me either way.
Ebay is also adding two directors to its board, including Jesse Cohn of Elliott Management, a hedge fund that disclosed a 4% stake in the company in January and began agitating for change.
This is typical of how these things go. Some rich hedge fund guy sees a chance to squeeze a company by threatening a proxy fight or other forms of pressure on management after buying a significant but still single digit percent stake in the company. Usually happens in companies whose stock price is depressed somewhat.
The eBay site is old, out dated, confusing and cluttered.
Yes and eBay is a pain in the ass to use. But you know what? They can do that because there is nobody well positioned to threaten them. They have lots of buyers and lots of sellers with no sign of that changing. Their growth prospects might not be great but they're going to be hard to displace. They are the closest think there is to monopsony for selling used and surplus stuff online.
eBay is so frustrating. On one hand, a platform like eBay works best when it is a monopoly - when all the buyers and sellers are in the same place. On the other hand, the fact that they are a monopoly has made them into an awful, awful company.
I have used eBay for over 20 years. The overall experience today is worse than it was 20 years ago. I would go as far as to say that their last good improvement was probably made 15 years ago.
What is even more frustrating is that they continue to do absolutely stupid things, and they constantly introduce either bugs or degraded user experiences, which take months to then fix. And there's no way to even report those issues with the goal of getting a resolution.
Here's an example: I have a lot of "Saved Searches" set up - this is how I buy a lot of items (I look for collectibles). About 2 years ago, eBay for some reason decided that they would only show about 30 characters of the 80 character auction title in the email. What this means is that I get notifications of auctions which I then have to click through to their site to see what the auction actually is. I have stopped doing that long ago.
Then, they decided that when you perform the same search on their desktop site, they would limit the auction title to 50 characters instead of 80. So even there, I can't exactly tell what is being sold without clicking through to the auction.
My guess is that a VP is being paid bonuses on clickthrough metrics. Meanwhile I'm guessing that sales are down.
It sounds like things are about to get even worse now that the hedge fund wants its pound of flesh.
There is far less action on eBay than there was 20 years ago, probably due to the high fees (you're going to fork over about 13.4% of every sale, since final value fee is 10% and PayPal fee is 3.4%), and also due to the cost of shipping things greatly exceeding the value of the things being sold (try selling cross-border - you usually can't get away with anything less than $18 to send something to Canada, which sucks if you're selling items for less than $100). They were revolutionary when they first started, but now are just "meh".
My sister was a big ebay user, both buying and selling, but has largely stopped both. The reason why was some "customers" would scam the sellers by taking the item, claiming some defect, and then threatening bad reviews if they didn't get a price reduction. It's shady and extortionist but there are people like that in the world. And Ebay backs them 100%. After a few cases of that she decided to stop selling anything there. That's a loss to both Ebay and it's legitimate customers. Multiply her experience by thousands and you get a declining platform.