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3 Reasons to Buy eBay Today

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Whatever's going on in the market or a specific company's history, there are always reasons to consider buying shares in a business. After all, some of the best opportunities in stocks are born from historically bloody times.

Motley Fool CAPS hosts a boatload of opinions from more than 120,000 members on nearly 5,400 stocks, each providing good reasons to own -- or sell -- a stock.

In the case of Internet commerce firm eBay (Nasdaq: EBAY  ) , a total of 3,738 members have given a bullish or bearish opinion on the company. Scouring the detailed information packed in pitches and other comments on eBay, here are three of the top reasons to buy the online auction maestro today:

1. Untapped potential
eBay's core auction business may be considered mature, but its ventures into PayPal and Skype are still early in their cycle, and becoming more important to future growth. Skype is the global chat leader, with 370 million users, while Paypal had a 19% increase in active registered accounts in the third quarter. Though Amazon.com (Nasdaq: AMZN  ) continues to snub PayPal, the electronic payment facilitator's wooing more top merchants to accept its payments, including Wal-Mart's (NYSE: WMT  ) website and Continental Airlines (NYSE: CAL  ) .

2. Leading brand
eBay's huge customer base is a strong competitive advantage, helping the business overcome tough market swings and even poor business decisions. The company is still projected to grow significantly, with a long-term growth estimate of 13.8%. Many CAPS members are willing to overlook gaffes that have angered some of the site's highest revenue-generating sellers.

3. Loads of cash
Like cash kings Apple (Nasdaq: AAPL  ) , General Electric (NYSE: GE  ) , and Google (Nasdaq: GOOG  ) , eBay pulls in massive amounts of free cash flow and has plenty of money in the bank. In bleak times, this cash cushion lends the company ample flexibility that rivals lack, giving eBay better odds to snap back from any economic downturn

Of course, there's a lot more devilry in the details of these buy-side opinions. That's why CAPS is such a great resource to check and balance your own analysis. You can read the bullish and bearish sides to every stock. To see what the very best CAPS members are saying now about eBay, click on over to Motley Fool CAPS and have a look -- it's all free, and your opinion's always welcome.

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Fool contributor Dave Mock discovered three reasons why playing baseball near the new-car lot is a bad idea. He owns no shares of companies mentioned here. Wal-Mart and eBay are Inside Value picks. Google is a Rule Breakers recommendation. eBay, Amazon.com, and Apple are Stock Advisor recommendations. The Fool's disclosure policy won't cover broken windows.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 11, 2008, at 5:22 PM, Patricia013 wrote:

    "eBay's huge customer base is a strong competitive advantage, helping the business overcome tough market swings and even poor business decisions. The company is still projected to grow significantly, with a long-term growth estimate of 13.8%. Many CAPS members are willing to overlook gaffes that have angered some of the site's highest revenue-generating sellers.

    eBay's huge customer base is a strong competitive advantage, helping the business overcome tough market swings and even poor business decisions. The company is still projected to grow significantly, with a long-term growth estimate of 13.8%. Many CAPS members are willing to overlook gaffes that have angered some of the site's highest revenue-generating sellers."

    This is about as intelligent as the thinking of a box of rocks! No matter how many times longtime ebay sellers tell you the place is headed downhill because its woefully mismanaged - the more you say buy buy buy! Well, go ahead and BUY and I'll be here a year from now to say "I told you so!"

  • Report this Comment On December 11, 2008, at 10:28 PM, ebaysucks wrote:

    Ebay is slowly choking their own business. They are demanding that sellers use paypal, which will increase their cash flow, but also increase the sales amount a seller needs in order to break even. Sellers will sell less, and now when you have an issue with ebay, your half, ebay, and paypal account gets closed. I recently lost all three of my accounts despite a 100% positive approval rating and hundreds of transactions, i.e. lower revenue for all three companies... While my accounts mean nothing to them, multiply my accounts by hundreds getting cancelled a day.

  • Report this Comment On December 11, 2008, at 11:14 PM, DLweld wrote:

    Well, as a long-time Ebayer I've certainly lost faith in it - as a seller it's getting harder to put stuff up for sale, and the way the feedback works - every transaction is a risk-the-business one for the seller. As a buyer, I've seen items I'm interested in drop (in my standard search) from 250 to about 100 to browse. I guess if ebay gives up on the one thing that set it apart in the e-commerce world (its weird and wonderful auctions that got the clicks and the eyeballs) it's going to be a big adjustment - I see little point in selling there now and the stuff to buy - well, mostly like stuff you can get at WalMArt - too bad, it was great and interesting while it lasted.

  • Report this Comment On December 12, 2008, at 3:26 AM, JAlanWatson wrote:

    Skype has nothing even remotely close to "370 million users", that is pure propaganda put out by the Skype marketing department and mindlessly parroted by every Skype employee and the majority of the press. Try to pin Skype down on how many of those are "real, active" user accounts, how many are abandoned or inactive, how many are spammers and pornographers who infest the Skype space now, and you will get a lot of double-talk or an immediate attempt to change the subject.

    If you are making investment decisions based on unsubstantiated propaganda like this, then you are in very serious trouble.

  • Report this Comment On December 12, 2008, at 10:21 AM, rogandantiques wrote:

    No point in bashing Ebay, they are doing a good job of that themselves. I'll tell you this- Ebay will be good if you are a competent day-trader, but in long term growth you can forget it.

    In a year Ebay will be gone and so will Paypal for that matter, both are glitch ridden companies run by nitwits who will retire in Tahiti with YOUR money. If you think bailing out Wall Street hotshots with golden parachutes is distasteful, wait til you see what investing in Ebay will get you!

    www.rogand-antiques.com

    www.antiques-collectibles.ecrater.com

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