eBay's Ticker Might Be 'PYPL' in Three Years
Christa Quarles, the Thomas Weisel Partners analyst who covers eBay (EBAY), had a throwaway line about yesterday's earnings from the auction and payment company: "We like to joke that they are changing the ticker symbol to PYPL."
She's referring to the large and growing part of PayPal within the eBay empire. Even as eBay's core auction or marketplace business saw revenue drop 18% in the last quarter to $1.22 billion, the PayPal division grew revenue 11% to $643 million.
At the recent analysts' day a few weeks back, eBay CEO John Donahoe and PayPal President Scott Thompson both clearly spelled out how the PayPal group was poised to dominate the world of online payments for years to come: Think the online equivalent of Visa (V) and Mastercard (MA).
Donahoe even went so far to say, the "opportunity at PayPal is bigger than the opportunity at marketplace."
Today, Visa trades at a forward P/E of 18 times, Mastercard is at 13 times and eBay is at 10 times. eBay has roughly the same market cap as Mastercard. I'm not a fan of quick fixes, but there's a compelling argument to make for changing eBay's name to PayPal with a PYPL ticker.
It doesn't make sense to do this today perhaps, but it will soon. PayPal is the core to an eBay turnaround in the next couple years.
Originally published in RealMoney.com on 4/23/2009 12:09 PM EDT Sphere: Related Content
