eBay Gets Ready For New Leadership (EBAY, DIS, AMZN)

Shares of online auctioneer eBay (NASDAQ: EBAY) are trading lower today to a new 52-week low on reports that CEO Meg Whitman will be stepping down.  The WSJ led this reporting and it actually took the back seat in order of magnitude because of what was going to be one ugly day had the Fed not intervened. 

Whitman had previously noted that no CEO should stay for more than a decade because of new challenges and changes in an industry.  That appears to be the case now with eBay having matured (we didn’t say peaked) in the U.S.  The company has a dominant auction in the U.S. by far and it has been making its entrances internationally when and where it can garner an edge or acquire a large auction property. 

The acquisition of Skype has been written down further by roughly $1.4 Billion and its "Neighborhoods" foray into social networking hasn’t gotten much press since the press releases and so-so coverage around its launch. It appears that the easy growth days have been seen and the low hangingfruit has been grabbed.  Maybe it is time for a new leader that cangrow the business in an environment that is going to be morechallenging.  Amazon.com (NASDAQ: AMZN) has also made much progress into online retail, although that hasn’t killed the "Buy It Now" aspects of eBay at all; but in theory Amazon could offer an auction platform on certain used goods either via eBay or against eBay now that it is a virtual storefront for anything and everything.

Shares are down more than 30% from 52-week highs over $40.00, and average analyst price targets look to be just under $41.00.  Meg Whitman was once thought to be a candidate for the head job of Disney (NYSE: DIS), although the company has done quite well under its current team.  Whatever she ends up doing, you can bet she isn’t retiring from corporate America entirely. ebay also is reporting earning after the close Wednesday, so if she is truly leaving then you can expect the formal announcement tomorrow.

Shares today are down 3.6% to $27.31, and the 52-week trading range before today’s drop was $27.44 to $40.73.  The intraday lows before the post-Fed recovery are recorded at $26.02.

Jon C. Ogg
January 22, 2008