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What eBay Is Telling Investors in Pre-Split Roadshow

With eBay Inc. breaking up in the third quarter at which time PayPal will file to go public, its executives kicked off a pre-split roadshow in New York on Monday to pitch Wall Street on why they should continue to hold shares and invest further in both companies.

Citi analyst Mark May issued a research report after attending eBay’s Devin Wenig and Scott Schenkel’s presentation where the executives told attendees that Google’s search penalty impacted new customer growth, and other marketing channels had not yet come online enough to offset that impact.

“Management is interested in expanding and diversifying its marketing channels beyond search, and highlighted social and messaging platforms as priorities,” May wrote.

The eBay executives said the company would be able to refocus on its core once separated from PayPal and eBay Enterprise, the core being small and medium sized businesses and consumer sellers; and value-seeking buyers – “and less on larger retail sellers looking to sell full-priced in-season products.”

On Monday, eBay and PayPal published their slide presentations that will be used in meetings with investors and analysts. eBay defined the marketplace today as “A global ecommerce marketplace of b2cmerchants offering new, fixed price inventory.”

While it doesn’t have a slide showing “eBay Tomorrow,” it does share its vision (in two slides): “eBay will be the world’s most vibrant marketplace for discovering great value and unique selection.”

And how will it do that?

  • Focus on our core;
  • Play to our strengths;
  • Build for the long term.

eBay’s slides indicate a discussion about mobile, engagement, and safety (low fraud rates, VeRO, and Money Back Guarantee) to investors. It also shared its strategic priorities:

1) a vibrant marketplace;
2) a strong, stable & secure commerce platform; and
3) engaging product & brand experiences.

eBay’s slide deck excluded eBay Enterprise – executives had previously revealed it’s looking to sell or spin off what was previously GSI Commerce and Magento.

The company also published PayPal’s roadshow slide deck, and in a post on the PayPal blog on Monday, Dan Schulman, the executive who will become PayPal CEO, said, “I’m looking forward to talking to investors this week about our vision for the role that PayPal will play as we continue to pursue our long-standing mission to make it easier for people to use their money to achieve their potential than ever before.”

He said PayPal would enable people around the world to move and manage their money and it would create an operating system for digital commerce. “We will continue to provide the very best-in-class in customer service and risk management through our 18,000 employees worldwide.”

But news that eBay cut its forecast for PayPal’s “free cash flow” caused eBay shares to fall on Monday. Bloomberg called it eBay stock’s biggest one-day slide since October.

You can find the eBay and PayPal investor presentation slide decks on the eBay Investor Relations website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.