Your SlideShare is downloading. ×
  • Like
PowerPoint
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Now you can save presentations on your phone or tablet

Available for both IPhone and Android

Text the download link to your phone

Standard text messaging rates apply
Published

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
818
On SlideShare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
43
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Thinh Tran Tu Nguyen John Koong Naco Chen George Chou
  • 2.
    • eBay’s mission is to build the world’s most efficient and abundant marketplace in which anyone, anywhere, can buy or sell practically anything.
  • 3. History
    • eBay Inc. was formed as a sole proprietorship in September 1995 and was incorporated in California in May 1996. In April 1998, eBay reincorporated in Delaware and in September 1998 eBay completed the initial public offering of their common stock.
  • 4. Present
    • As of December 31, 2003, through wholly owned and majority-owned subsidiaries and affiliates, eBay had Websites directed toward the United States, Australia, Austria, Belgium, Canada, China, France, Germany, Hong Kong, Ireland, Italy, The Netherlands, New Zealand, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan and the United Kingdom.
  • 5.
    • 38th Richest person in the world with net worth of $5 billion according to Forbes
  • 6. Founder & Chairman
    • Pierre M. Omidyar founded eBay as a sole proprietorship in September 1995. He has been a director and Chairman of the Board since eBay's incorporation in May 1996 and also served as its Chief Executive Officer, Chief Financial Officer and President from inception to February 1998, November 1997 and August 1996, respectively.
  • 7. Officers & Compensation
    • Whitman, Margaret C ………………………………
    • President & CEO
    • Bannick , Matthew J. ………………………………………
    • Senior Vice President and General Manager, Global Online Payments and Chief Executive Officer of PayPal
    • Cobb, William C. …………………………………………….
    • Senior Vice President and General Manager, eBay International
    • Webb, Jr., Maynard G ………………………………
    • Chief Operating Officer
    • Jordan, Jeffrey D …………………………………….
    • Senior Vice President, eBay North America
    • $2,191,976.00
    • $1,021,605.00
    • $753,591.00
    • $1,849,617.00
    • $1,298,928.00
  • 8. Profile
    • eBay Inc. developed an Internet-based community in which buyers and sellers are brought together to buy and sell almost anything. The eBay online service permits sellers to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated, topically arranged service that is available online seven days a week.
  • 9. Online Auction
  • 10. REVENUE BY PRODUCT CATEGORIES (by percentage) MOTORS 29% COMPUTERS 9% CONSUMERS/ELECTRONICS 9% CLOTHING/ACCESSORIES 8% MOVIES/MUSICS 8% SPORTS 7% COLLECTIBLES 6% HOME/GARDEN 6% TOYS 5% CAMERAS 4% INDUSTRIAL 4% JEWELRY 5% J
  • 11. $- $10,000.00 $20,000.00 $30,000.00 $40,000.00 $50,000.00 $60,000.00 DOLLARS (millions ) EBAY AMAZON COSTCO STAPLES BED BATH & BEYOND COMPANY INDUSTRY COMPARISON OF RETAIL SPECIALTY MARKETS MARKET CAPITAL
  • 12. INDUSTRY COMPARISON OF RETAIL SPECIALTY MARKETS EBAY 46% AMAZON 17% COSTCO 16% STAPLES 12% BED BATH AND BEYOND 9%
  • 13. Growth rates % (Strength) 1.71 NA NA Dividends (5-Year Annual Avg.) -3.24 NA 109.17 EPS (5-Year Annual Avg.) 5.12 16.51 82.55 Sales (5-Year Annual Avg.) 31.20 NA 92.10 EPS (Qtr vs year ago qtr) 31.20 NA 92.10 EPS (YTD vs YTD) 11.20 27.80 58.70 Sales (Qtr vs year ago qtr)   S&P 500   Industry   Company
  • 14. Price Ratios Price Ratios (Strength) 12.70 89.90 71.60 Price/Cash Flow Ratio 2.91 5.64 9.67 Price/Book Value 1.49 4.73 19.12 Price/Sales Ratio 16.5 NA 49.6 P/E Ratio 5-Year Low 64.8 NA NA P/E Ratio 5-Year High 21.3 NA 82.1 Current P/E Ratio   S&P 500   Industry   Company
  • 15. Profit Margins % (Strength) 5.6 -66.7 17.7 5Yr Net Profit Margin (5-Year Avg.) 9.2 -66.6 27.6 5Yr PreTax Margin (5-Year Avg.) 47.5 53.2 86.9 5Yr Gross Margin (5-Year Avg.) 7.2 -1.9 23.7 Net Profit Margin 10.9 1.2 29.3 Pre-Tax Margin 48.0 54.3 87.8 Gross Margin   S&P 500   Industry   Company  
  • 16. Financial Condition (Strength) 11.77 3.03 8.15 Book Value/Share 6.0 1.7 1.2 Leverage Ratio 3.3 2.0 119.9 Interest Coverage 1.0 2.2 2.4 Quick Ratio 1.5 2.4 2.8 Current Ratio 1.23 0.22 0.00 Debt/Equity Ratio   S&P 500   Industry   Company
  • 17. Investment Returns % (Weakness) 5.7 -42.3 7.1 Return On Capital (5-Year Avg.) 2.0 -30.2 6.1 Return On Assets (5-Year Avg.) 12.1 NA 7.2 Return On Equity (5-Year Avg.) 6.3 -1.8 12.0 Return On Capital 2.4 -1.3 9.9 Return On Assets 14.2 NA 12.0 Return On Equity   S&P 500   Industry   Company
  • 18. Management Efficiency (Strength) 0.4 0.7 0.5 Asset Turnover 7.9 25.3 NA Inventory Turnover 7.1 10.5 8.9 Receivable Turnover 315,000 310,000 475,000 Revenue/Employee 23,000 -6,000 113,000 Income/Employee   S&P 500   Industry   Company
  • 19. Market Capitalization 110.29 x 100 Ask: 46.61 x 100 Bid: 79.29 Open: 79.47 Prev Close:   1.14 (1.43%) Change: Jul 07 Trade Time: 82.33 Last Trade: N/A Div & Yield: 0.954 EPS (ttm) : 82.11 P/E (ttm) : 51.49B Market Cap: 8,776,227 Avg Vol (3m) : 6,410,703 Volume: 49.87 - 94.13 52wk Range: 77.92 - 79.37 Day's Range:
  • 20. Holding Period Return (expected)   0.0136 0.0138 0.9053 0.3421 HPR 33 33.45 33.91 64.61 86.71 Price 0 0 0 0 0 Dividend 0.5906 Earnings growth rate estimate (2004) 0.0136 0.0138 0.9053 0.3421 HPR = Ending Price – Beginning Price + Distributions Beginning Price Background Analysis: 2000 2001 2002 2003 2004 (12/31)
  • 21. Free Cash Flow to Equity (Thousand) (Thousand) (Thousand) (Thousand) (Thousand) -132,779 -154,274 -212,218 -286,671 -117,363 FCFE -3,614 604 1,790 110,678   (+) ∆ in long-term debt 165,756 165,644 378,568 416,372 (-)∆ in working capital 49,753 166,323 161,907 581,751 (-)Capital Expenditures 38,050 86,641 76,576 159,003 (+)Deprecitaion 48,294 90,448 249,891 441,771 NI 2000 2001 2002 2003 2004
  • 22. Risk Analysis [Equity/(Equity +((1-T)Debt))]* BetaEquity=Beta_unlevered 2.5398 1.5112 Unlevered Beta Beta = COV (R IBM , R S&P500 ) / VAR (R S&P500 ) 3.3931 2.7586 1.7072 1.5877 Beta eBay 2001 2002 2003 2004
  • 23. Discounted Cash Flow Model -0.3985 -0.3780 0.5878 0.5885 Ke(required return on equity) 33.45 33.91 64.61 83.46 P 7/15/2004 -0.1619 -0.3756 -0.3508 0.5906 G 12/31/2004 277,259,000 311,277,000 649,293,000 657,400,000 shares outstanding -154,274,000 -212,218,000 -286,671,000 -117,363,107 FCFE 12/31/2004 2001 2002 2003 2004(7/15)
  • 24. CAPM The company is currently underpriced because Ke( DCF model) > Ke(CAPM); 0.5885>0.0419 -0.4741 -0.6074 0.5575 0.0419 Ke(required return on equity) 3.3931 2.7586 1.7072 1.5877 Beta -0.1511 -0.2261 0.3206 0.0185 Rm-Rf 0.0386 0.0163 0.0102 0.0125 Rf 2001 2002 2003 2004(7/15)
  • 25. Market Efficiency
    • June 23, 2004. Ebay announces the eBay solutions directory, a new online directory of software and services that supports trading activity on the World’s Online Marketplace.
    • WEAK FORM
  • 26.
    • June 3, 2004 OPEC announces oil production increase up to 2 million barrels a day in July 2004.
    • NO FORM
  • 27. Cost of Capital and Optimal Capital Structure 0.0792 0.1402 0.2278   WACC WACC=We*Ke + Wd*kd*(1-T)+ Wp*Kp 0.0000 0.0000 0.0000 Kp 0.0347 0.1081 0.2374 Kd 0.0900 0.1500 0.2400 Ke 0.0000 0.0000 0.0000 Wp=Preferrd stock/(Equity+Debt+Preferred Stock) 0.1486 0.1197 0.1587 Wd=Debt/(Equity+Debt+Preferred Stock) 0.8514 0.8803 0.8413 We= Equity/(Equity+Debt+Preferred Stock) 2001 2002 2003
  • 28. M&M
  • 29. Current Capital Structure Equity Debt Industry Capital Structure 82% 18% Equity Debt 100%
  • 30. Strengths
    • High growth
    • Positive HPR
    • Very low debt
    • Under priced
    • High profit margins
  • 31. Weakness
    • Return on Equity
    • Beta slightly high
  • 32. Expert Analyst
  • 33. Conclusion
    • We recommend that investors BUY shares of eBay common stock