Don’t take AmazonBay literally.
Is it darkest before the dawn? Will someone go get the baby that just got thrown out with the bathwater?
The recent house vote on
In what appears to be a conflict of interest, eBay and its subsidiary PayPal seem to be taking opposing stances in relation to the pending congressional restrictions on Internet gambling in the US.
As recently as February, PayPal Europe has been resurfacing relations within online gambling through its partnership with Betfair, whilst its owner eBay has put itself firmly on the side of those looking to ban online gambling in the US.
eBay’s backing of the proposed bill would appear to make it very difficult for its subsidiary to continue its business relationships with online gambling entities based in Europe. This would seem to point to the online auctioning company’s long-term desire for a global ban on Internet gambling, which when considering the unison between PayPal and Betfair, seems a strange move.
from breakingviews.com
Ebay: At the Allen & Co. conference in Sun Valley, Idaho this past week, Ebay boss Meg Whitman delivered a colorful presentation about the online auctioneer’s business. One slide not on display was that showing its sinking stock price – Ebay is down 40% this year. There could be more bad news when the company releases second-quarter earnings Wednesday.
It will take time to sort out Ebay’s many challenges. Not least of these is what to do with Skype. Investors haven’t warmed to last fall’s $2.6bn takeover of the internet telephone firm. This business faces increasing competition and has yet to produce meaningful returns.
Meanwhile, Ebay’s core auction business is slowing. Revenue growth fell to a new low of 28 percent in the first quarter. That has had a knock-on effect on its PayPal payments system, which also faces renewed competition from Google.
But with the stock selling for 15 times estimated 2007 ebitda, Wall Street already has priced in much of the bad news. That presents Whitman with an opportunity. Ebay’s balance sheet is strong. It sports about $3bn in net cash – enough to buy back almost a tenth of its shares.
Since Ebay throws off some $2.5bn in cash annually, it could continue returning cash to shareholders in years to come. To Sun Valley’s assembled moguls Ms. Whitman referred to Ebay’s purchase, payment and communications businesses as the Power of Three. But to score, Ebay needs to touch four bases. A buyback would do the trick.
Meanwhile, it was interesting to see that Betfair – as predicted here – has actually helped ‘grow the pie’ in Australia:
Rather than stealing their lunch, Betfair actually boosted the TABs.
As the graphic shows, on July 1 — the last pre-Betfair Saturday — the three TABs held $6.1 million for the win on the eight races at Flemington. Last Saturday — ‘Betfair day’ — their holdings jumped 18 per cent to $7.2 million. Again, on a very similar eight races in very similar conditions at the same Flemington.
Interestingly, the increases in win tote holdings on the Queensland, Northern Territory and South Australia Unitab and the Victorian, Western Australian, Tasmanian and Australian Capital Territory Supertab were a similar 12 per cent or so.
But holdings on the NSW TAB leapt 30 per cent — perhaps suggesting that state really is the home of the big punters.
