eBay Inc. EBAY has appointed two independent directors to its board. This appointment is part of its preparations to be a standalone company after it spins off PayPal.
The company has appointed the wearable-camera maker GoPro’s GPRO president Tony Bates, and the chief executive officer of the American Red Cross, Gail McGovern, to its board. Following the company’s annual meeting to be held on May 1, eBay’s 15-member board will include 13 independent directors.
eBay is taking all the necessary steps to ensure that the PayPal spin-off takes place smoothly. Last December, the company planned to cut 10% of its workforce in its core marketplace business, which includes eBay.com and StubHub, to reduce operational costs.
Moreover, in a bid to strengthen the marketplace business, the company has adopted a fixed price format and undertaken several initiatives to attract big sellers and customers, improve technology and navigation of its properties, invest in better fulfillment services and especially focus on mobile customers. Its drive to provide complete online solutions for traditional retailers should further boost growth.
The company has a long-term expected earnings growth rate of 12.10%. It has delivered positive earnings surprises in three out of the last four quarters with an average surprise of 1.74%.
Following the news, the shares went up 1.2%. The spin-off, which is expected to be completed in the second half of this year, if carried out successfully, could further raise the share price as the downsides are limited.
eBay is one of the largest online retailers in the world and is poised to grow through strategic acquisitions. The company’s earnings of 81 cents beat the Zacks Consensus Estimate of 77 cents by 5.2%. Guided earnings for the March quarter were also better than expected though guided revenues fell short.
eBay shares currently have a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the same space are Autobytel Inc. ABTL and PetMed Express, Inc. PETS, sporting a Zacks Rank #1 (Strong Buy).
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