batman (basic)
March 1st, 2019 at 12:14 pm | PermalinkPhil / EBAY – Elliott Management has one of the best records / reputations in the Bay Area relative to activist investing ( they were drivers behind MSFT )- I think this may be a good opportunity. They are close to getting a board seat.
Elliott Management Corporation (“Elliott”), which manages funds that beneficially own more than 4% of eBay Inc. (“eBay” or the “Company”), today released a letter outlining a significant value-creation opportunity at eBay. The letter, addressed to the Company’s Board, noted that the opportunity could lead to eBay being valued at $55-$63 per share, representing upside of more than 75% to 100% from today’s price.
EBAY/Batman – Well a chimpanzee could have turned MSFT around once they got Ballmer out but EBAY is a good company and doesn't need to steal your identity to make money but where was your enthusiasm back in Dec, when they were at $26? Now up almost 50% you want to get in?
$37.42 is $32.4Bn and they are dropping $3Bn to the bottom line but that's without paying taxes so I'd say $600M in taxes so we'll call earnings $2.4Bn so p/e is still nice at 13.5.
| Year End 31st Dec | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019E | 2020E | CAGR / Avg | |
| $m | 8,257 | 8,790 | 8,592 | 9,298 | 9,927 | 10,746 | 10,858 | 11,514 | +5.4% | |
| $m | 2,454 | 2,476 | 2,197 | 2,325 | 2,431 | 2,222 | -2.0% | |||
| $m | 2,856 | 46.0 | 1,725 | 7,266 | -1,017 | 2,530 | 2,343 | 2,514 | -2.4% | |
| $ | 1.57 | -0.69 | 1.60 | 6.37 | 1.96 | 2.08 | +5.8% | |||
| $ | 1.57 | -0.69 | 1.64 | 6.37 | 1.82 | 2.08 | 2.67 | 3.05 | +5.8% | |
| % | -21.6 | +289 | -71.5 | +14.7 | +27.9 | +14.4 | ||||
| x | 17.8 | 13.9 | 12.2 | |||||||
| x | 0.64 | 0.97 | 1.10 | |||||||
| Profitability | ||||||||||
Not great growth but not no growth so 15x is very fair and 20x not out of the question so, I think I'd pay $30 and be happy so we can sell 10 EBAY 2021 $35 puts for $4.10 ($4,100) in the LTP and keep an eye on them but, if you like them, there's nothing wrong with the $32 ($9.15)/$42 ($4.40) bull call spread at $4.75 and 20 of those would be $9,500, netting you into the $20,000 spread for $5,400 with an upside of $14,600 (270%) and you're $10,000 in the money to start.
