eBay issues gloomy forecast as tech stocks tank again

Online auction giant eBay lowered its fourth-quarter revenue expectations and reported third-quarter numbers that met analyst forecasts.

Company executives said Wednesday that it expected fourth-quarter profit to come in between 25 cents to 27 cents per share, compared with the 39 cents it reported during the same period in 2007.

For the third quarter, eBay's earnings came in at the low end of Wall Street expectations with revenues of $2.12 billion, up $228 million from the third quarter of 2007. Net profit was $492 million, or 38 cents per share. Analysts predicted that eBay's earnings for the quarter would be between $2.1 billion and $2.15 billion.

The company's shares fell 13.6 percent, or $2.41, to close trading Wednesday at $15.33. In after hours, shares of eBay were trading at 14.22, down $1.11 or 7 percent. The markets, however, suffered another bloodbath and eBay was in no way the only tech stock that was punished. The CNET Tech Index closed down 7.9 percent at 1,131.56.

The Nasdaq fell 247.45 points or 6.8 percent. Shares of Apple dropped more than 5 percent to close at $97.95, and eBay rival Amazon finished the day at $48.72, down 12 percent. Microsoft shares fell nearly 6 percent to $22.66.

San Jose, Calif.-based eBay warned last week that the ailing economy was hampering efforts to spur growth in auctions. The company also told investors that it was planning a 10 percent staff reduction.

(Credit: Susan Dove/CNET News)

[almostrice]

It is not the downturn the investors should be worried about. Management of eBay has been a joke for the past 4 years. Especially the last 2.

[texaslabrat]

Can't say I'm surprised that they are struggling to meet their numbers during a time when one would think they should be totally cleaning up as people seek to make extra $$ on the side and/or find bargains to stretch their paychecks a little further. The "geniuses" running the company have done everything they can to chase away the loyal sellers who have been the core revenue stream and source of growth for Ebay over the years with the new corporate philosophy and draconian anti-seller policies...the new CEO actually said he was "embarassed" with the business model of ebay because of its yard-sale-like appearance (so WhyTF did he accept the job?). I guess they forgot that most of the sellers tend to be buyers too...so when they **** off the sellers they lose the buyer "half" of that person as well. End result: less transactions on the site. I hope that Ebay diminishes to complete irrelevance soon, seeing how they were so vindictive in their quest to eradicate the "garage sale" business model at the expense of all those folks who put them on the map with that very idea.

[usarioclave]

When the new CEO made that "yard sale" comment, I knew it was over. eBay is a big yard sale.

eBay's whole reason for existence was to help people make money by selling their stuff. As they've moved further and further away from that, their stock price (and revenues) have dropped.

Soon, they'll be a lame version of amazon.com.

Why, eBay, why?

[zincmann]

Burn EBay Burn, its no wonder your failing, this is just the beginning, its good to see enough sellers have left or are selling less because they are turned off by so many changes NO one wanted that its hitting them where it should, its pocketbook. There are choices and the people have spoken, change back or die a slow painful death EBay!

[richardxmagnum]

Ive been buying and selling on ebay for 6 years now and it worked out well for me until the seller changes left me more vulnerable to unscrupulous buyers.Paypal owned by ebay is equally faulty leaving you no guarentees of recovering your losses from a bad buyer or seller.Right now I am considering closing both accounts and just hanging it up.Sold some car body parts on Craigslist for free recently that I couldnt sell on ebay and made close to a thousand bucks.No fees or bs from the buyer.b