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EBay and RealReal Shares Hammered on Declining Customers and Profit Respectively

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21 comments on EBay and RealReal Shares Hammered on Declining Customers and Profit Respectively

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Ebay After Hours chart from Google Finance

EBay Still Losing Customers

Bloomberg reports EBay Warns Investors It’s Still Losing Customers

EBay Key Points

  • EBay Inc. warned investors that first-quarter sales will miss estimates as shoppers return to pre-pandemic spending habits. 
  • Chief Executive Officer Jamie Iannone maintains the company’s advertising and payments businesses can boost profits even if total spending on the site falls.
  •  EBay ended the quarter with 147 million active buyers, down 9% from a year earlier. Gross merchandise volume, which is the value of all goods sold on the site, fell 10% to $20.73 billion in the period ended Dec. 31.

RealReal 

The RealReal, Inc. is an online and brick-and-mortar marketplace for authenticated luxury consignment. The RealReal sells consigned clothing, fine jewelry, watches, fine art and home decor. 

RealReal Share Price 

RealReal chart courtesy of StockCharts.Com, annotations by Mish

I confess, I never heard of this company. Then again, I am not into luxury consignment.

The company came up in a report on EBay.

Unlike, EBay, REAL was hammered before the earnings report even came out. 

The blue boxes in my chart are gaps that have filled. Gaps serve a magnets. This is a caution about buying strong reports or selling weak ones. 

Demand for Luxury Goods and Value Investing

Gaps aside, the demand for luxury goods from the pretend wealthy is about to collapse into the gutter along with the stock market. 

The chart of EBay shows it’s not just luxury goods at risk. 

The most amusing thing about the EBay chart is the P/E of 3.0. The market doesn’t seem to believe that and neither do I.

This is a warning to value investors. What looks cheep can get a lot cheaper.

Most People Have No Idea How Much Stocks are Likely to Crash

In case you missed it, please see Most People Have No Idea How Much Stocks are Likely to Crash.

This post originated on MishTalk.Com.

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Mike Shedlock

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21 Comments
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Anon1970
Anon1970
4 years ago
Many of Ebay’s offerings are no bargains. I got tired of getting emails from Ebay and just closed my account.
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KidHorn
KidHorn
4 years ago
I assume with things returning to normal, people will buy more stuff at retail stores. And overall people will have less money to spend. So, it should be no surprise that people will be buying less online.
I buy lots of stuff off ebay. Mainly things like seeds and small plants that aren’t sold at local retail stores. I’ve never been scammed. Even if I were, my purchases are typically < $10, so not worth the hassle of complaining.
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Casual_Observer2020
Casual_Observer2020
4 years ago
Putin asks that the Ukrainian military lay down its arms. There will be no occupation but there will be full annexation. 
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SAKMAN1
SAKMAN1
4 years ago
Ebay, LOL. The poop will really hit the fan in Jan 2023 when people who sold a few things from their garage for more than $600, at a loss, get a 1099 from ebay and have to pay taxes on it. Too funny. Then we will see ebay get trounced.
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MPO45
MPO45
4 years ago
“This is a warning to value investors. What looks cheep can get a lot cheaper.”
Thanks for the tip Mish, I guess I should dollar cost average on the way down.   I’ll use that advice on stocks I want to own, not these two turkeys. 
Apple is heading in the right direction down.   I may snap up shares at 160, 150, 140, 130, 120 via naked puts to get in that extra discount and dollar cost average.   I will hold until Apple hits $1000 on the way back up post apocalypse.
Let’s see where gold goes from here, Russia now onto stage 2 in Ukraine.
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Casual_Observer2020
Casual_Observer2020
4 years ago
Reply to  MPO45
From what I can tell it is stage 3. Kyiv is being surrounded and will fall fairly quickly. The government will be in exile in Switzerland by the end of the week. Prepare for a full scale land war in Eastern Europe with US missiles and weapons now fully deployed in the Eastern Europe. 
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KidHorn
KidHorn
4 years ago
Reply to  Casual_Observer2020
I’ve heard nothing about Kiev being surrounded. All I’ve heard is a few military sites were hit. No troops or equipment has moved into Ukraine. Where are you getting this information?
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KidHorn
KidHorn
4 years ago
Reply to  KidHorn
Now I’ve read about troops entering Ukraine.
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FlyNavy1
FlyNavy1
4 years ago
EBAY’s current P/E is around 19.
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dtj
dtj
4 years ago
I no longer buy on ebay after I got scammed by a major ebay seller. Bought 2 items, got sent only 1. Ebay sided with the seller because “item was delivered”. The seller also scammed the USPS by using a “flat rate envelope” rate to ship a large 3 lb item.
Ebay doesn’t allow negative feedback if you “open a case”. Seller had thousands of feedback with zero negatives. Bye Bye ebay, I will only buy directly from major retailers.
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LostNOregon
LostNOregon
4 years ago
Reply to  dtj
Similar experience a few years ago. I swore off eBay at that time. It’s rigged for people that sell or buy a lot of stuff. eBay would not allow me to make any negative feedback. 
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Maximus_Minimus
Maximus_Minimus
4 years ago
Reply to  dtj
I bought an iPhone on eBay, and soon it started having display problems, which were apparently a known defect, but Apple didn’t honor.
Soon after, the phone started delaminate, the screen bent and popped open.
I recon, somebody was selling pre-production runs from some Chinese factory. With proper production control, these should have been destroyed.
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honestcreditguy
honestcreditguy
4 years ago
Reply to  Maximus_Minimus
my buddy is top seller on ebay for a very busy sector, much loved by the buyers….of course he is straight shooter
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Nasty Edwin
Nasty Edwin
4 years ago
Looks to me like Expedia just experienced a blow off top.  Crazy valuation.  
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ohno
ohno
4 years ago
Small sellers leaving because of the new $600 1099k requirement won’t help.  Personally I think it should be raised to 5k I have lots of used items I’d like to sell and no receipts from years past.  All fine and dandy till you get audited.  I’m not paying self employment tax, state tax, federal tax and ebay fees.  Some of the items would sell for higher prices nationally but now it’s not worth the hassle.
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Mish
Mish
4 years ago
Reply to  ohno
Excellent comments
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shamrock
shamrock
4 years ago
Reply to  ohno
Yes, I was about to say the same.  Nowhere to hide from Biden taxes even when you are selling your old stuff at huge losses.  This is the final nail in ebays coffin after they started collecting sales tax on everything, even on sales between private sellers to private borrowers.  I expect paypal will suffer the same fate, nobody wants to deal with 1099s. 
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Ray
Ray
4 years ago
Reply to  ohno
Same here.  Exactly why i no longer sell on ebay. I still buy things but sell no more.  You shot yourself in the foot Ebay.
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Mish
Mish
4 years ago
Reply to  Ray
Did Ebay do this voluntarily or because they had to?
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Quark711
Maximus_Minimus
Maximus_Minimus
4 years ago
Reply to  Quark711
The same should apply to Amazon, does it not?
There is a silver lining to it. The bunch that buys stuff at brick-and-mortar stores to resell on Amazon, might be culled.
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