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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Terms of Sale of Narrow-Moat eBay’s South Korean Operations Match Expectations; Shares Fully Valued

David Swartz Equity Analyst

Analyst Note

| David Swartz |

As had been reported in the media over the past week, eBay announced the sale of 80% of its South Korean operationsto Emart, the largest physical retailer in the country, for KRW 3.44 trillion (about $3.0 billion). This deal (in the works for more than a year) does not affect our narrow moat rating for eBay, which is based on the network effect of its operations in the United States (40% of 2020 revenue). Moreover, the sale price is in the range of our estimates in prior reports and has no immediate impact on our per-share fair value estimate of $58. Still, eBay will retain 20% ownership, allowing it to participate in any upside in the future if Emart grows the business. In this vein, Emart intends to use its stores for shipments while investing more than KRW 1 trillion ($880 million) over the next four years in online fulfillment centers, which should make it more competitive with e-commerce rival Coupang.

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Company Profile

Business Description

With $100 billion in marketplace gross merchandise volume, or GMV, generated in 2020, eBay's Marketplace facilitated more than 2% of the $4.3 trillion global online commerce market (based on eMarketer estimates). EBay's strategic priorities include revitalizing its Marketplace platform by emphasizing its unique product assortment and value proposition, improving the seller and buyer experience, utilizing structured data/artificial intelligence for listing searches, promoted listing advertising, and improving its mobile commerce capabilities. EBay partnered with Netherlands-based Adyen for payment intermediation beginning in 2018.

Contact
2025 Hamilton Avenue
San Jose, CA, 95125
T +1 408 376-7008
Sector Consumer Cyclical
Industry Internet Retail
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 12,700

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