E Bay Case Study

1478 words - 6 pages

Section A: Problem/Issue StatementFollowing a 220% increase in profits and 800% increase in revenues over six months, eBay Inc. is considering the following courses of action:1.One being an IPO offering, requiring the sale of less than 9% of the company. This offering will be for 3.5 million shares, with an expected sale price at between $14 and $18 per share.2.The other is to delay the offering for six months. This will cost eBay approximately $1 million in direct expenses; however eBay's additional losses will be far greater due to the delay of major investment initiatives.In determining the appropriate course of action, the following topics were considered:1. What are the costs and benefits of eBay going public?*How do current market conditions affect the decision to go public?*What are the advantages and disadvantages of delaying the IPO versus proceeding now?2. What is the appropriate IPO price?*What is the intrinsic value of eBay?*What drives IPO price besides intrinsic value?*How do the various "stakeholders" view pricing:oShareholders (current and IPO purchasers)?oCompany?oManagement?oEmployees?oInvestment Bankers?oCompetition?Section B: RecommendationWe recommend that eBay should go ahead with the IPO offering.*We feel that the company is in a good situation right now to offer the IPO.oAlthough other companies have been reluctant to issue and IPO in the past weeks, we feel that eBay's situation is different.oWe can be the IPO that will heat up the market again.*The share price that we have decided at, we feel is a reasonable price for the potential value of the company.oSince we valued our company and we can receive the price that we want right now there is really no reason why we should wait for six months.After reviewing the plans to delay the IPO, we decided it was not in the best interest of eBay's stakeholders.*The market may likely be worse off in six months, and in that case we will receive a price lower than what we can now.*We will incur costs of over $1 million, which we feel is unnecessary because the market currently is relatively not performing too unfavorably.Overall, we feel that going public right now is an appropriate time for eBay because eBay is a company that investors will be enthusiastic about the value in during a time when most investments appear to be high risk.Section C: Case BackgroundIn relating the IPO process to eBay's IPO situation, we made the following assumptions and observations:1.The timing of an IPO can very well determine how much capital a company can raise. This timing relates both to market conditions and the current performance of the company.*Investor enthusiasm for IPO's run in hot and cold cycles.a.Favorable economic conditions positively impact the cash flows of both publicly traded and privately held firms.b.Waves of IPO's occur when the cash flows of both the issuing firms and publicly traded companies are high.i.IPO waves coincide with times of relatively high share prices.ii.We currently...

Find Another Essay On EBay Case Study

EBAY Essay

1401 words - 6 pages disadvantages of going public, Ebay's competitors, investors risks when buying eBay stock and most importantly a fair and attractive offering price.1. An initial public offering had both advantages and disadvantages. In Ebay's case, some of the advantages in addition to obtaining capital for corporate growth and repayment of outstanding debt were: (1) An increase in the company's net worth which would improve the borrowing capability at a lower

eBay Essay

769 words - 4 pages eBay.com is words most successful company which always made profit and still growing at rapid speed since 1995. eBay’s first priority was to help anyone trade practically anything on earth, soon the eBay trading platform provided an automated, topically arranged, easy-to-use, online service which is available on a 24-hours-a-day, seven-days-a week basis. Seller across world found this attractive and reach out to wider customer base across globe

Ebay

2655 words - 11 pages Introduction In 1995, eBay used the Internet to pioneer a business model that provided for efficient one-on-one online trading in an auction format. eBay was successful in employing the power of the Internet to improve the efficiency of one of the world oldest form of barter, the auction process.Throughout history, auctions have been used to bring people together to in order to create the most efficient markets for the sale of goods that are

Ebay

1044 words - 4 pages HEBUTT Grocery Store HEB is one of the largest retail grocery stores in Texas. This privately owned business was first opened in 1905 in Kerrville as a store where they would sell food in bulk as a charge and delivery operation. Howard and Florence Butt and her three sons, which were Charles, Eugene, and Howard E, ran this store in Kerrville. In the early nineteen hundreds and even today HEB focused their attention to the needs of their

Amazon and eBay : The New Face of Web Services

1650 words - 7 pages . AWS Solutions. [online] Available at: http://aws.amazon.co m/solutions /aws- solutions/ [Accessed: 12 Jan 2014]. 123helpme.com. 2014. Amazon and Ebay: The New Face of Web Services: Business Internet. [online] Available at: http://www.123helpme.com/amazon-and-ebay-the-new-face-of-web-services-view.asp?id=167197 [Accessed: 12 Jan 2014]. Chaffey, D. 2014. Amazon.com case study - Smart Insights Digital Marketing Advice. [online] Available at: http

Dear sister: EBay case

614 words - 2 pages ' several dating sites for your lonely clients! Now this linking or trespassing became known to eBay, and they refused to allow Bidder's Edge to continue using their site for their own benefit. eBay cited that the activity from Bidder's Edge would reduce eBay's system performance and cause system unavailability and/or data loss. The courts ruled in eBay's favor citing their website as private property.The eBay case against Bidder's Edge shows how

Ebay analysis

987 words - 4 pages The name “eBay” (http://www.ebay.com) is synonymous with “online auctions”. Founded in September 1995, the company qualifies as a genuine cultural and economic phenomenon (Bunnell, 2000, p.vii). The site can be credited with creating and defining an entire industry and has remained the dominant force in the online auction world, with anywhere from 70 to 90 percent of the person-to-person online auction market. eBay is also the 15th most visited

eBay Powerseller

2782 words - 11 pages The secrets of eBay Power Sellers! How to MAKE MONEY on eBay Use this valuable guide as a MONEY MAKING TOOL. Read it from start to finish over and over. The amount of information and wholesale sources you will find seems overwhelming at first, but don’t be intimidated. Take your time and be patient. It is going to take you several days to check out the sites because there are just so many items to choose from. This guide is updated for 2003

ebay Inc

1237 words - 5 pages eBay Inc. is the world’s largest online marketplace and auction website, with more than 90 million active users globally. Founded in 1995 in San Jose, California by Pierre Omidyar, the first item sold on eBay was a broken laser pointer for $14.83(cite). eBay’s first target market was antique collectors and sellers. Now eBay connects a diverse community of buyers, sellers, and many small businesses all over the world. Practically anyone can buy

Ebay Selling

1727 words - 7 pages Mr. John Donahoe,I am writing you today with a lot of frustrations from recent events that have happened to me on Ebay as a Seller, and I have not been able to receive any help or intelligent answers from your customer service staff until the last person recommended that I write a letter to you. I just hope that this letter actually reaches you and not some other customer service rep in the Philippines.A brief history of my dealings on Ebay

THE RISE AND FALL OF THE eBay REICH Essay (2008) on eBay by Richard Bilderberg. Works cited, Appendix. No attachments. Media & Business Studies: E-commerce

10718 words - 43 pages summary of the practices and conduct of the ruler of a totalitarian state, in the case of eBay with parallels to the third Reich under Hitler, that cannot be overlooked: all aspects relate to the "world's biggest marketplace", eBay, where you can apparently "shop victoriously." The following is an overview of the current situation for eBay (as of May 2008) its rules, fees, feedback policy, abuse of its users (buyers and sellers), unwanted new users

Similar Essays

Ebay Essay

1749 words - 7 pages Technology Architecture for the Future, 2003 http://www.andale.com/track/track_quickstart.jsp Retrieved from the World Wide Web: December 2003 http://www.mahller.com/ief248/ Retrieved from the World Wide Web: December 2003 Case study of eBay: http://www.brightmail.com/pdfs/eBay_case_study.pdf Retrieved from the World Wide Web: December 2003 eBay analysis software: The Indispensable Auction Tool, http://analyze.auctionknowhow.com Retrieved from the

Ebay Essay

2412 words - 10 pages very low stock price. However, with the decisions made by former CEO Meg Whitman and current CEO John Donahoe, the company’s value was recovered, and is steadily increasing. Overview The purpose of this case study is to point out Ebay’s potential and capabilities by analyzing its strengths, weaknesses, opportunities and threats. Our group’s recommendations include SWOT Analysis Opportunities EBay is the top ranked online auction within

E Bay Analysis

2818 words - 11 pages , eBay vendors compete with both online, and bricks and mortar retailers. Competition: eBay is the dominant player in the online auction industry. The strategy mapping of the online auction industry in Exhibit 2 (in the case study) gives a visual of eBay’s three main competitors-Amazon.com, Yahoo.com and uBid.com. Yahoo! and Amazon were late movers but are now actively competing with eBay. These competitors may have healthy financials, high

Amazon And Ebay Essay

6411 words - 26 pages Inc. is prohibited. GROWTH STRATEGY A comparative study of the history of these two companies points out that Amazon has gone from an exclusive product seller to a company that now sells products, offers services and is a technology provider. On the other hand, eBay has been completely focused as a service provider. eBay has stayed the course without excessive change. Amazon's Growth Amazon.com started out as an online bookseller. Indeed, to some