My colleague Tim Beyers wants to ignore eBay's
In fact, that's a large part of my concern with eBay right now. It looks a little too much like Microsoft did half a decade ago. Simply put, eBay is a world-changing company that, nevertheless, is struggling to grow yet is priced as though it were just entering a tremendous expansion. Don't forget that over the first three quarters of the year, eBay has actually earned less money spread over more shares than it did over the comparable period a year ago. Sure, eBay may want to blame that on stock-option expensing. The fact still remains that eBay's shareholders are already not seeing the so-called growth that's priced into its stock.
When eBay's business has a chance to grow into its valuation, I'll be interested. Until then, I'll happily consider buying other tech stocks in the bargain bin while waiting for reality to catch up with eBay's stock. In the long run, a company's market price converges with its true value. It doesn't look as though that's happened for eBay, yet. When it does, I'll happily change my tune.
- Read the bull argument
- Read the bear argument
- Read the bullish rebuttal
- Sound off in Motley Fool CAPS
- Vote for the winner