EBay's Shares Rise 16.5 Percent
Thursday, September 21st 2000, 12:00 am
By: News On 6
NEW YORK (AP)â€” EBay Inc.'s shares soared 16.5 percent Wednesday on the Nasdaq Stock Market after the online auction company announced that it projects $3 billion in sales in 2005.
The sales projection implies revenue growth approaching 50 percent per year, the San Jose, Calif.-based said after its annual meeting with analysts.
Shares of eBay soared on the news, closing up $10.88 at $76.56.
EBay said its revenue goal is based on estimates of the size of its various markets, including collectibles, practical items, computers, used autos and parts, and the continued strength of its global model.
EBay said its worldwide market potential for these areas will increase to $2 trillion by 2005, from the current $1.6 trillion.
The company reiterated its goal of achieving gross profit margins in the mid 80 percent range and operating margins of 30 to 35 percent before 2005. For the second quarter, ended June 30, eBay posted gross margins of 76 percent and operating margins of 9 percent.
EBay, which currently has operations in five countries, said it expects to be in 10 countries by the end of 2001 and 25 countries by the end of 2005.
``EBay has long operated the most friendly e-commerce model, and this quarter demonstrated the benefits of its model,'' Tim Albright, an analyst at Salomon Smith Barney, said in a report released Wednesday. ``Ebay business is a scalable, international trading platform. No one else has the combination of buyers, sellers and listings that go into cooking up gross merchandising sales.''