eBay layoffs vs. 2 billion dollar stock buyback
NEW YORK (Reuters) - eBay Inc may cut 1,500 jobs, according to an article in Barron’s weekly, citing a report published last week by investment-research firm Wedge Partners.
The Wedge report, according to Barron’s, said eBay’s business was “deteriorating” and the company was readying layoffs that could affect 10 percent of its 15,000 employees.
How does this relate to eBay burning billions of dollars buying back it’s own shares?
In 2008 eBay profit is roughly 2B and they have already spent 1B or more on eBay stock buy back in 2008 and have a plan to spend another billion by end of 2008. This will effectively wipe out their net revenues for the year.
They sure are not in a cash crunch, they will be just left with little less cash than they had in 2007 (little under 4 billion dollars) and their share price in the toilet inspite of those hefty stock repurchases.
Layoffs plus continued buy back in 4th Q would be a typical eBay’s disregard for their own employees. eBay management will rather layoff thousands of workers, just like they abuse their sellers and buyers while investing obscene amounts of money into attempts to prop up their eBay shares.
If they do layoffs, it looks like a PR move aimed purely at Wall Street… Time will tell.
eBay can disregard there employees all they want. It is the stock holders who they keep happy.
Comment by Joe T Palmyra — September 16, 2008 @ 11:28 am
Although I sell on ebay, I would never buy their stock. They are making silly decisions in the company that is driving both buyers and sellers away. Mentor Capital (MNTR) is my most recent stock pick. They are the primary funding source of Quantum Immunologics (QI), a bio-tech company with a goal of marketing their immunotherapy for the treatment of breast cancer. They have FDA clinical trials on the way. According to an article published on Breast Cancer Investing, Mentor capital’s financial support in QI could result in stock price gains.
Comment by mlgreen8753 — September 20, 2009 @ 1:25 pm