Ebay And RealReal Shares Hammered On Declining Customers And Profit Respectively

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Ebay After Hours chart from Google Finance

eBay After Hours chart from Google Finance

eBay (EBAY) Still Losing Customers

Bloomberg reports eBay Warns Investors It’s Still Losing Customers

eBay Key Points

  • eBay Inc. warned investors that first-quarter sales will miss estimates as shoppers return to pre-pandemic spending habits. 
  • Chief Executive Officer Jamie Iannone maintains the company’s advertising and payments businesses can boost profits even if total spending on the site falls.
  •  eBay ended the quarter with 147 million active buyers, down 9% from a year earlier. Gross merchandise volume, which is the value of all goods sold on the site, fell 10% to $20.73 billion in the period ended Dec. 31.

RealReal 

The RealReal, Inc. (REAL) is an online and brick-and-mortar marketplace for authenticated luxury consignment. The RealReal sells consigned clothing, fine jewelry, watches, fine art, and home decor. 

RealReal Share Price 

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RealReal chart courtesy of StockCharts.Com, annotations by Mish

RealReal chart courtesy of StockCharts.Com, annotations by Mish

I confess, I never heard of this company. Then again, I am not into luxury consignment.

The company came up in a report on eBay.

Unlike, eBay, REAL was hammered before the earnings report even came out. 

The blue boxes in my chart are gaps that have filled. Gaps serve a magnets. This is a caution about buying strong reports or selling weak ones. 

Demand for Luxury Goods and Value Investing

Gaps aside, the demand for luxury goods from the pretend wealthy is about to collapse into the gutter along with the stock market. 

The chart of EBay shows it's not just luxury goods at risk. 

The most amusing thing about the EBay chart is the P/E of 3.0. The market doesn't seem to believe that and neither do I.

This is a warning to value investors. What looks cheep can get a lot cheaper.

Most People Have No Idea How Much Stocks are Likely to Crash

In case you missed it, please see Most People Have No Idea How Much Stocks are Likely to Crash.

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