Yahoo Finance What investors can expect from eBay in 2015
eBay reports 4Q14 earnings: Investors need to watch this company in 2015 (Part 11 of 11)
Management’s outlook for 2015
Later this year, eBay (EBAY) plans to spin off from PayPal. At the same time, eBay is looking to cut costs and has plans to cut 7% of its workforce in 2015. eBay will cut more jobs from eBay Marketplaces than from the PayPal unit.
eBay management also believes that eBay Marketplaces and eBay Enterprise have divergent opportunities. As a result, eBay might pursue an IPO or sale of eBay Enterprise later this year.
During the earnings conference call, eBay management highlighted the impact of currency headwinds on its revenue growth and the expected earnings per share in 2015.
eBay (EBAY) plans to focus its resources for the next few quarters on the following three main priorities:
spinoff of PayPal from eBay
capital structure and financial flexibility for eBay and PayPal in order to boost investments
strategic flexibility to maximize synergies
eBay to focus more on Click & Collect
eBay (EBAY) has started to focus more on its Click & Collect. The company recently signed a deal with Woolworths in Australia. Through this deal, eBay’s customers will be able to pick up their online eBay purchases from Woolworths stores.
eBay is focusing on Click & Collect, but it’s less enthusiastic about same-day delivery. The company believes that although same-day delivery allows customers to get their products quickly, the high shipping costs may potentially impact the company’s bottom line.
While eBay is avoiding high shipping costs, the same-day delivery market is poised for rapid growth. According to a report from Business Insider’s BI Intelligence research service, and as the above chart shows, the US same-day delivery market could grow from $0.10 billion in 2014 to $4.03 billion in 2018 at a compound annual growth rate of 150%.
Amazon (AMZN) and Google (GOOG) are trying to leverage same-day delivery market growth with aggressive moves in this space.
eBay plans to expand eBay Deals in 2015
In its conference call, eBay management noted the importance of eBay Deals. After the overwhelming success of eBay Deals over the 2014 Thanksgiving weekend, eBay now plans to invest more resources and capital in eBay Deals. During the five-day Thanksgiving weekend, eBay Deals in North America soared past $1 billion in sales for the first time.
For a diversified exposure to eBay, investors can consider ETFs such as the SPDR S&P 500 (SPY). This ETF invests in the 500 largest US firms, and the technology sector makes up 18% weightage.
Investors can also consider ETFs such as the Dow Jones Internet Index Fund (FDN) for portfolio exposure to eBay. This ETF has about 5.3% of its portfolio invested in eBay.
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