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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.

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

$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

$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.

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

With almost 700 million payments transactions handled, Q4 was the busiest in @PayPal's history. $EBAY #eBayQ412

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.

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.

  • Cyber Monday gives eBay a big boost

    Cyber Monday has been good to eBay.

    Shares of the auction site hit a 52-week high Thursday, just days after logging strong gains on one of the most important online shopping days of the year for retailers.

    It's not just online shopping that's attracting consumer interest. All in all, it looks like consumers are increasingly getting more comfortable with paying for their purchases on mobile devices.

    eBay (EBAY) also got a boost MORE

    - Nov 29, 2012 11:49 AM ET
  • Why Italian bonds are rallying

    Italy's borrowing costs continue to fall as investors bet the European Central Bank will backstop the nation's massive bond market.

    The Italian government sold €2.9 billion worth of 10-year bonds Thursday at a yield of 4.45%, down from 4.92% at the previous auction in October. It also sold €3 billion of 5-year notes at a yield of 3.23%, compared with 3.80% last month. Yields and prices move in opposite direction.

    In the MORE

    - Nov 29, 2012 10:38 AM ET
  • Feds bust black market in dinosaur fossils

    Make no bones about it, dinosaur remains are worth a pretty penny on the black market.

    Federal prosecutors on Wednesday charged a Florida man with illegally importing dinosaur fossils from Mongolia and China, including a Tyrannosaurus bataar skeleton that sold for more than $1 million at auction.

    The man, Eric Prokopi, was arrested by federal agents at his home in Gainesville, Fla., and will appear in court this afternoon, according to MORE

    - Oct 17, 2012 1:43 PM ET
  • Italy's bond test

    Italy faced its first in a series of debt auctions Wednesday and it wasn't pretty.

    The government sold 6.5 billion euros of 1-year notes at an average yield of 3.97%. That's sharply higher than the 2.34% yield at last month's auction and may signal further trouble ahead.

    Italy's borrowing costs have been creeping higher as investors worry the country may be headed closer to bailout territory. The yield on Italy's 10-year MORE

    - Jun 13, 2012 9:47 AM ET
  • Spain to test bond market

    Spanish bonds, yo te quiero infinito?

    Spain plans to auction up to 2 billion euros worth of bonds Thursday in what could be an important test of the government's ability to raise money from investors.

    Days after the Spanish treasury minister said the government is in danger of being shut out of the market, Madrid will offer between 1 billion and 2 billion euros worth of 2-year, 4-year and 10-year MORE

    - Jun 6, 2012 2:34 PM ET
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