As Brent Breaks $100, eBay Shares Sink Following Weak Forecast

February 24, 2022 09:25

As tensions remain high in eastern Europe, the price of gold edges closer towards $2,000, whilst Brent crude has surged above $100 a barrel for the first time since 2014.

As oil and gold post gains, equities flounder. Yesterday, Wall Street’s main indices closed the session lower, with the Dow Jones, S&P 500 and the Nasdaq Composite all falling by 1.38%, 1.84% and 2.57% respectively.

Meanwhile, earnings season begins to wind down, with the majority of the S&P 500’s constituents having already announced results for the final quarter of 2021.

Yesterday, at the market close, it was the turn of eBay, who reported revenue of $2.61 billion, in line with analysts’ expectations, and Earnings per Share (EPS) of $1.05, exceeding the forecasted $0.99 per share.

However, these better than expected earnings were overshadowed by a weak forecast for the current quarter, something which appears to be becoming a theme amongst tech stocks in recent weeks.

The e-commerce company forecast current quarter revenue to be between $2.43 billion and $2.48 billion, which would represent a decline at the lower end of 5% year on year, and is significantly lower than analysts’ expectations of $2.61 billion.

The company further estimates that EPS will come in at between $1.01 and $1.05 which, again, is lower than the market's anticipated $1.08 per share. Moreover, eBay also announce that annual active buyers on their site had fallen 9% during last quarter.

It was perhaps predictable that e-commerce companies, which have reaped the benefits of a pandemic fuelled boom in online shopping over the last couple of years, would experience a drop off once the world opened back up and shoppers returned to the high streets.

However, exacerbated by the current climate, eBay’s weak forecast sparked a sell-off last night and again this morning in extended hours trading, with share price plummeting almost 10%. Before this sell-off, eBay shares had already fallen almost 18% this year, compared with the broader S&P 500’s 11% drop.

Depicted: Admirals MetaTrader 5 – eBay Daily Chart. Date Range: 15 October 2020– 23 February 2022. Date Captured: 24 February 2022. Past performance is not a reliable indicator of future results.

Depicted: Admirals MetaTrader 5 – eBay Weekly Chart. Date Range: 9 August 2015 – 23 February 2022. Date Captured: 24 February 2022. Past performance is not a reliable indicator of future results.


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Roberto Rivero
Roberto Rivero Financial Writer, Admirals, London

Roberto spent 11 years designing trading and decision-making systems for traders and fund managers and a further 13 years at S&P, working with professional investors. He has a BSc in Economics and an MBA and has been an active investor since the mid-1990s