eBay Pops 8% As Activist Investor Gets Involved
Steve Miller | Jan 22, 2019 01:41PM ET
Summary:
- eBay (NASDAQ:EBAY) traded 8% higher on Tuesday morning, after an activist investor floated the idea of splitting the company into smaller firms.
- Our analysis is that while the stock has made an important bottom, there may be better opportunities to take a position in the near future.
Elliott Management, an investment manager that owns 4% of eBay, recommended splitting the e-commerce giant into smaller firms to maximize shareholder value. Its “Enhance eBay Plan” includes spinning off ticket exchange StubHub, online classified properties, and other reforms.
In a letter to eBay’s board, Elliot said, “Significant underperformance occurred despite strong end-market performance. As the broader internet universe has flourished, especially e-commerce peers, eBay’s stock has floundered.” Elliott believes its plan would double the share price.
Our analysis of the market cycles for EBAY is that the stock is in the rising phase of its current cycle. We see $36 as resistance, with a pullback likely in the near term. While the stock has been in a negative pattern, indications are it has made an important bottom, which was confirmed by today’s “breakaway gap”. As such, we expect minor pullbacks, and then higher prices in the spring/summer.
For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel .
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.