Not cool, Gmarket (Nasdaq: GMKT). You tricked me.
As South Korea's leading auction website, I though that you were far removed from the marketplace hiccups that we're seeing with eBay (Nasdaq: EBAY) closer to home. You had handily beaten analyst estimates in four of your first five quarters as a public company since last summer's IPO. I figured the pros were heading for another bruising.
Instead, my faith took a beating.
A 26% spike in revenue to $56.9 million isn't good enough. A 7% profit uptick to $0.13 per share is quite frankly embarrassing. Wall Street had you down for a profit of $0.16 a share on $60.9 million in revenue.
I guess rattling my faith wasn't enough. You had to rough up those margins, too.
I get it. It's hard to get folks to pay for auctions. You have to make that up elsewhere. With 17.9 million unique monthly visitors during the period, serving up ads and skimming a little on the fee-based side makes sense. So even though your site shepherded $848.1 million worth of transactions, you posted just a 15% uptick in transaction-fee revenue, compared to a 46% spike everywhere else.
You have excuses? The Chuseok holiday that fell into the third quarter this time around -- instead of the fourth quarter, as it did last year -- trimmed four online shopping days from the quarter? A hot September delayed the demand for warm fall clothing?
I believe you, honestly. And since these factors will reverse themselves in the current quarter, I'd better see a blowout quarterly report in three months. I know October went well. Can you keep that going?
And until you do, where will I get my publicly traded growth-stock fix? MercadoLibre (Nasdaq: MELI) is "en fuego" in South America, but it doesn't report until next week. China's Baidu.com (Nasdaq: BIDU) will launch an auction site next year, but it's up against the formidable Taobao. Yahoo! (Nasdaq: YHOO) owns a chunk of Taobao, as well as Japan's top auction site -- and a piece of Gmarket, actually -- but it's also packing more baggage than a traveling circus.
So that brings me back to you, Gmarket. I guess I'm a glutton for punishment. Either that, or I really believe that the current quarter will find you back in your familiar market-trouncing pose. Beating Wall Street in five of your first seven quarters as a public company in three months? I've seen better, but you'll have to do.
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