EBay Shops Its Classified-Ads Unit: Report

The division could sell for $10 billion, knowledgeable sources told The Wall Street Journal.
Author:
Publish date:

EBay  (EBAY) - Get Report shares rose Friday after a report that the online marketplace is moving to sell its classified-ads business, potentially for $10 billion.

For more than a year investors have been pushing eBay to dump the classifieds division and ticket broker StubHub. In December, eBay announced a deal to sell StubHub to Viagogo for $4 billion.

Knowledgeable sources told The Wall Street Journal that among those showing interest in eBay’s ad unit are private equity firms TPG and Blackstone Group  (BX) - Get Report and strategic players Naspers, which is a South African e-commerce company, and German publishing company Axel Springer. Potential buyers have to present indications of interest in March, the sources said, according to the report.

EBay classifieds are mostly used overseas to advertise goods and services in local areas, much like Craigslist in the U.S.

EBay, founded by Pierre Omidyar in 1995, started out with a bang, but faded in recent years, as its auction style marketplace was overtaken by Amazon. Its valuable subsidiary PayPal split off in 2015.

EBay’s stock has languished over the past two years, sliding 12.4%, while the S&P 500 index has gained 21.3%.

Morningstar analyst R.J. Hottovy likes the idea of eBay selling its classified business or its core marketplaces.

“We still see a place for a large C2C marketplace like eBay in the broader online commerce landscape,” he wrote in a report Friday. “But we believe it will need a more significant brand repositioning, complementary acquisitions, or operational restructuring to compete.”

Hottovy puts fair value for eBay shares at $38.

At last check, eBay traded at $38.24, up 1.46%.

The author owns shares of Blackstone.