EBay Could Introduce Dividend

EBay continues to feel the lingering impact of the May 2014 data breach, with management noting that it is having difficulties re-engaging occasional users, but analysts are positive

R.J. Hottovy, CFA 27 October, 2015 | 8:15AM
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After spinning off PayPal as an independent company in July 2015, eBay (EBAY) finds itself at a critical juncture with respect to the evolving digital commerce landscape as well as changing seller and buyer behaviours. EBay continues to feel the lingering impact of the May 2014 data breach/password reset and Google search algorithm changes, with management noting that core users have returned at high engagement levels but that it is also having difficulties re-engaging "occasional" users.

We would not be surprised to see the initiation of a dividend within the next several years or increased M&A activity 

Management's blueprint for a bringing back users includes a "back-to-basics" approach, prioritizing unique product selection, improved seller tools, data-driven merchandising, structured/catalogue data for manufactured product listings (designed to alleviate search engine optimization issues and facilitate more dynamic pricing), increased mobile capabilities, and emphasis on adjacent platforms like StubHub and classifieds.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
eBay Inc80.59 USD5.75Rating

About Author

R.J. Hottovy, CFA  is a director of equity analysis with Morningstar.