EBay Sheds its Classified-Ads Business
EBay (EBAY) has made a deal to sell its classified-ads business to Adevinta ASA, (ADE:NO), an Oslo, Norway-based company. Adevinta will pay eBay with $2.5 billion in cash and about 540 million shares of Adevinta stock.
EBay has been looking for a buyer for its classified-ads arm since February. Investors have been urging eBay to sell this part of its operations for some time so the company can concentrate on its core business.
EBay used to own PayPal (PYPL) and StubHub, but sold them due to similar investor concerns about the company focusing on its online auction operations. Last year, eBay’s classifieds business generated $1.1 billion in revenue in comparison to its auction business’ $7.6 billion.
Adevinta Expands its Presence
Ebay’s classified-ad unit, which is similar to Craigslist, is mainly active in Canada, Mexico, Africa, Australia, and parts of Europe. Adevinta currently runs digital marketplaces in 15 countries, so acquiring eBay’s operations will help it expand its reach—especially in Germany, one of the largest economies in Europe.
The new, combined company will have a significant presence in 20 countries, and it is estimated that its annual revenue will be $1.8 billion. Adevinta’s stock rose 36% on news of the acquisition.
EBay Works to Stay Competitive
Now that eBay has plans to shed its classified-ad operations, it is focusing on keeping its core business competitive. Ebay was a pioneer in the ecommerce sphere, but it has had difficulty keeping up with the likes of Amazon (AMZN).
Elliott Management Corp. and Starboard Value LP, activist investors in eBay, have been pushing the company to make big changes in order to remain an important ecommerce player, and to get its share prices up. In April, eBay appointed Jamie Iannone as its CEO, who was formerly the COO of Walmart’s (WAL) ecommerce division. Investors are hopeful that with new leadership and a streamlined structure, eBay will be able to stay an important part of the online shopping landscape.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.