eBay Briefing Riles Outside Traders

Regulation FD bars companies from delivering "material" information to select investors or analysts. Its definition of "material" is vague, and seems to trip alarm wires at the Securities and Exchange Commission when it's information about earnings guidance, new products or developments regarding customers, stock splits or management changes.

During the Friday call, eBay disclosed none of those, but instead drilled deeper into disclosures it made in its Wednesday earnings call, such as investments in PayPal and China. The call was clearly intended as a handholding gesture, a diplomatic salve for any investors who may have started to think that eBay jumped a financial shark with its fourth-quarter report.

So eBay is safe on the Regulation FD question -- it's highly unlikely the SEC will consider taking action on the call. But anger from investors isn't what the company needs during a week when eBay has already heard from thousands of customers peeved over its decision to raise listing fees on its site.

"Holding this conference call says the company is more interested in its larger shareholders than in its smaller ones who have just as much right to hear from its management," said another fund manager at a major financial firm.

Will eBay allow more investors in on the live call next time? "I don't want to speculate on every single conversation we'll be having in the future," said Durzy. "All earnings calls will be open to everyone in the future, as they have always been. We'll continue to follow the rules we've been following all along."

But if eBay's approach hasn't changed, something about the company has. All the things that eBay has been hammered on this week -- raising fees, missing its earnings number, speaking with a select crowd of investors -- are things it's done in the past without any significant reaction. The halo effect that followed eBay for so long looks today more like a black-hole effect.

Maybe some disgruntled customer put a hex on the company, or maybe there's a retrograde planet somewhere in the skies. But for this week at least, the company that could do no wrong can't seem to do anything right.