EBay Inc (NASDAQ:EBAY) shares jumped on Thursday after one analyst said Wednesday’s fall in price made the stock a good value. BusinessWeek reports that Evercore Partners’ Ken Sena raised his rating on shares of eBay Inc (NASDAQ:EBAY) from Equal-weight to Overweight and maintained his price target of $64 per share.
In a report issued to investors today, Sena said eBay’s stock fell on Wednesday after Mastercard Inc (NYSE:MA) said it would raise fees for digital wallet transactions. He said that put pressure on eBay shares and pushed them 4 percent lower on Wednesday, which in his estimation, was too low. With today’s 3 percent increase, the stock has almost recovered from Wednesday’s fall.
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The Odey Special Situations Fund was up 4.2% in February, outperforming its benchmark. The MSCI World USD Index was up 2.6% for the month. In his February letter to investors, which was reviewed by ValueWalk, Adrian Courtenay said the fund remains fairly defensively positioned because its merger arbitrage book, which mostly consists of what they Read More
Sena believes eBay Inc (NASDAQ:EBAY) can manage the increase in fees because it already accounted for that increase in the outlook for its 24 percent PayPal profit margin. At this point we don’t know just how much the fee will be raised, but Sena expects that it will have a very minimal effect on the online retailer’s profit margins because it was already expecting an increase.
On Wednesday eBay also pointed fingers at Google Inc (NASDAQ:GOOG) for its advertising values. A study conducted by the site indicated that paying for keywords to advertise on a search engine did not affect the seller’s sales much, if at all. The site said the problem is that buyers of products in its listings were already loyal to the site and would have come there anyway, whether directly or through the site’s marketing channels, like advertising on Google.