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PayPal pays off for eBay investors

January 17, 2013: 12:22 PM ET

Auction site eBay continues to impress investors, thanks in large part to the ongoing success of PayPal.

Late Wednesday, eBay reported better-than-expected earnings and revenue for its latest quarter. And while the company issued slightly weaker guidance for the current quarter, its full-year outlook was rosier.

Shares of eBay (EBAY) rallied nearly 4% to a new 52-week high Thursday. The stock has been on a tear, soaring 41% over the past six months.

eBay credits the growing success of PayPal, which recorded a 250% surge in mobile payment volume in 2012 to nearly $14 billion as more consumers used mobile devices to satisfy their shopping appetites. In fact, PayPal ended the year with roughly 123 million registered accounts, up 15% year over year.

"Mobile continues to rewrite the commerce playbook, and we continue to be a mobile commerce and payments leader," said eBay CEO John Donahoe.

And StockTwits traders seem to agree.

spbaines
Just looking at $EBAY results: GMV growth of 16%yoy, accelerated from ~11%yoy during the rest of the year. Strong stuff.

Sejd213
$EBAY, this is what investors like to hear! Has resulted in 14 straight quarters of sales growth.PayPal's sales rose to $1.54 billion, Bullish

firstadopter
$EBAY call: PayPal margins did come down in 4th quarter "we invested more" "drive consumer awareness" "product" "merchant ubiquity"

That's not necessarily a bad thing is it? eBay can't count on PayPal to be its only cash cow. In fact, the company's Marketplaces biz is gaining some nice traction, delivering a record revenue of $2 billion in the fourth quarter.

InvestingJungleA
$EBAY The one big positive data point to me in this earnings? $13B in Mobile transactions and $14B in PayPal mobile payments in 2012

eBayIncBlog
With almost 700 million payments transactions handled, Q4 was the busiest in @PayPal's history. $EBAY #eBayQ412 http://stks.co/gJP6

All of that is true but also keep in mind that the fourth quarter is holiday shopping season so it's not a huge surprise that there would be a spike in sales. I know I did 90% of my shopping online this year. But it does seem like eBay is doing a good job of staying in tune with consumers' fickle behavior.

commonking
Market Mechanics, when people don't want to sell their shares and other people want to buy them, they have to pay more, price goes up $EBAY

Couldn't have put in simpler terms myself. The company really does seem like it's on a roll ... and investors want to get on that bandwagon.

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