eBay and Credit Deflation

Another one in trouble, eBay in stock buybacks and spinoff of its PayPal funny money processor...

On July 18, for example, eBay reported it had bought back $355 million of stock during the second quarter and would repurchase $2 billion additional shares. The primary objective, the company said, was to offset the additional shares being issued as compensation.

Our rules reveal our weaknesses:

"We are deeply committed to setting up eBay and PayPal to succeed and to deliver sustainable value to our shareholders," Donahoe said.
...
For the quarter ending March 31, marketplaces revenue fell 4 percent to $2.07 billion, hurt by the stronger dollar. But the company said it sees signs of stabilization in active buyers and gross merchandise volume, or the total amount of goods sold, excluding the impact of the stronger dollar.

So the question is how will they offer a value to shareholders (isn't value something you offer to customers?)  That falling dollar trope again...  the game of laundering profits overseas no longer works in credit deflation...  "signs of stabilization?"  Like McDonalds, just what is the plan?  No plan, really.  Noting can be done when the business you built is predicated on EZ cheep credit.

For the last forty years the mantra pushed by the FEDS was "get big or get out. "  Now the mantra is "If Big, Viability in Doubt."

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post