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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
  • eBay: Buy, buy, buy

    More people are hitting the eBay auction block to buy and sell their wares, and they're using PayPal to complete those online transactions.

    EBay (EBAY) reported third-quarter earnings per share that beat Wall Street estimates by a penny and said they have 14% more active users over last year.

    Investors said buy, buy, buy to the stock Thursday, sending its shares up more than 4%. Several Wall Street analysts did too.

    StockTwits MORE

    - Oct 18, 2012 3:00 PM ET
  • Take that Square! eBay still a leader in mobile payments

    Mobile payments seems to have replaced social as the tech phenomenon that everybody is talking about. Privately held Square made waves with its groundbreaking deal a few weeks ago with coffee king Starbucks (SBUX). Wal-Mart (WMT), Target (TGT) and several other prominent retailers have teamed up to create the Merchant Customer Exchange. And Google (GOOG) has big financial and wireless firms such as Citigroup (C), MasterCard (MA) and Sprint (S) MORE

    - Aug 23, 2012 10:27 AM ET
  • eBay stock rallies to 6-year high

    Click the chart to track shares of eBay.

    Shares of eBay rallied nearly 10% Wednesday, hitting their highest level since January 2006, after the company topped earnings and sales expectations for the second quarter.

    eBay (EBAY) CEO John Donahoe credited the solid performance to the successful turnaround of the company's e-commerce business, called eBay Marketplaces.

    Revenue for e-commerce business jumped 9% from a year earlier to a record high of $1.8 MORE

    - Jul 19, 2012 11:50 AM ET
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