eBay owns eBay.com, Half.com, Rent.com, Shopping.com, and other classified sites, where users list items they want to sell. These are some of the most popular ecommerce sites. They are together referred to as eBay Marketplaces, and constitute 58% of eBay’s stock price, based on Trefis estimates.
In 2008, users listed a total of 2.7 billion items for sale on these sites within eBay Marketplaces. The sold Items included books, collectibles, clothing, furniture, electronics, motor vehicles and boats. eBay made money by charging the seller, a percent of the price for an item sold – known as the “take rate”.
Average “take rates” went up from 7.1% of price of items sold in 2005 to 7.9% in 2008. We estimate that “take rate” will drop to 7.5% in 2009, and continue to decline over time to under 7% due to more discounts to eBay’s “powersellers”, as-well-as, competition from other online retailers like Amazon.
Despite this forecasted decline in “take rates”, our stock price estimate for eBay is $32.48, while eBay’s market price was $16.09 at yesterday’s close. Within eBay’s content on our platform, you can see how “take rate” will evolve, and change the “take rate” forecast to see how sensitive eBay’s stock price is to the “take rate”.
