SAN JOSE, Calif. (CelebrityAccess) Even though much of eBay’s recent stock plummet could be attributed to layoffs and a forecast of slow growth, some of the drop could be attributed to subsidiary StubHub, which has had a rough 12 months itself.
Ebay recently laid off 300 of its staff from its San Jose, Calif., headquarters and lowered its revenue forecast, citing sluggish growth. Although sometimes investors appreciate layoffs, considering it streamlining, this time the July 19 announcement caused Ebay’s stock to drop from $37.95 to $34.11 and, at press time, remained at the $33.80 mark.
As noted by IQ magazine, eBay missed Credit Suisse’s quarterly expectations with StubHub believed to be playing a key role. Ebay had a 4 percent rise in revenue but it’s the slowest growth since second quarter 2017, with eBay executives blaming the U.S. sports market, which is StubHub’s bread and butter.
“It was a historically bad MLB (baseball) start of the season … and it was a 4-game NBA (basketball) series, it was a 5-game Final Series, it was a 5-game hockey series. There were just a lot of things that broke the wrong way on the landscape,” eBay CEO Devin Wenig said.
Wenig said that he expects the climate to improve for the rest of the year and, in a note written to investors by financial firm Raymond James, it was agreed: “Marketplace initiatives… are ramping slower than expected and likely shifts potential acceleration to 2019,” reads the note. It goes on to say StubHub’s growth “is likely to remain challenging in the near term.”