4 Earnings and sales topped views, lifting eBay (NASDAQ:EBAY) stock 3.4% to 65.59, a new high. Any deal will appear on the eve of eBay’s divide into two entities, with the company aimed to spin off its online marketplace business from its PayPal payments unit.
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A consortium of private equity firms, including Permira and Sterling Partners, purchased eBay Enterprise, which creates, develops and operates online shopping sites for retailers, with notable partners including Ikea, PetSmart, Timberland and Sports Authority.
Overall, eBay posted a profit of $US83 million, or US7c a share, compared with a year-earlier profit of $US676m, or US53c a share. The company said its results were hampered by a stronger dollar, but PayPal and eBay Marketplaces delivered better revenue fundamentals. EBay has revenue of around $80 billion with more than 150 million buyers visiting the site.
EBay Inc. past year fought to keep hold of PayPal in a contentious battle before reversing course.
Tomorrow, the minute before the clock strikes midnight, eBay and PayPal will part ways.
Icahn said: “As we have said many times in the past, we believe that if an offer is made for a company it should be the decision of the shareholders – not the board – to decide whether that offer is worth accepting”.
“The real question is whether or not the company can effect enough change rapidly enough to bring back some of those customers it lost to competitors like Amazon”, King said.
Revenue rose to $4.38 billion from $4.1 billion.
But buying PayPal has also paid off for eBay. Management noted that both eBay and PayPal saw acceleration in growth during the second quarter. The eBay Enterprise unit recorded $288 million in revenue in the first quarter of this year.
“I am proud of what we’ve accomplished: building two global leaders in commerce and payments…” said John Donahoe, eBay Inc.’s president, CEO and director, on the Q2 conference call. Payment volume through eBay Marketplaces was $14.5 billion.
The unit suffered a blow last week when Toys “R” Us one of its larger customers, said it would take its USA business in-house by mid-2016.
EBay will see revenue growth of 3 percent to 5 percent with non-GAAP earnings of $1.72 a share to $1.77 a share.
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eBay, once unshackled from the focus of growing PayPal, will need to revitalise and plan for future growth to keep investors happy and fend off any possible hostile takeovers.
