Sold to close EBAY
Sold 600 shares of EBAY at $26.46. This closes the position originally entered on 6/1 at $24.05. Total return less commission was $1,430.10. Return per share after commission was $2.38.
Among all US retailers, eBAY is the most exposed to the UK, with 15% of its sales originating there. The revaluation of the British Pound following the UK’s vote to leave the EU will have an immediate negative effect on this business. I expect there to be a secondary negative effect, as British shoppers will curtail the import of discretionary goods via eBay, as their purchasing power has diminished.
Secondarily, while I applaud the efforts made by management to become more competitive with Amazon, by offering standardized product descriptions and reviews, I have to wonder if these efforts aren’t too little, too late, to stem the gradual erosion of mindshare that eBay has suffered over time.
The company will report earnings after the close tomorrow, and since I am not bullish on that event, I am going to take the opportunity to walk away with about a 10% return over the 7 week holding period.