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Baupost Group’s Position in eBay Continued to Increase in 4Q14

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Mar. 17 2015, Updated 5:05 p.m. ET

Baupost Group raised stake in eBay

The Baupost Group increased its position in eBay (EBAY) during 4Q14. The position accounted for a significant 10.27% of the total portfolio in 4Q14. The fund disclosed ownership of 9,315,000 shares—up from 6,096,707 shares in 3Q14. The position was also raised in 3Q14. This indicates a bullish bias.

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Overview of eBay

eBay is a global technology company. It enables commerce through three reportable segments:

  1. The Marketplaces segment includes the eBay.com platform, its localized counterparts, StubHub, and sites for online classifieds.
  2. The Payments segment consists of PayPal and Bill Me Later.
  3. The Enterprise segment includes the company’s Magento business. Magento provides commerce technologies, omni-channel operations, and marketing solutions for merchants of all sizes.

In October last year, eBay said that it was planning to spin off PayPal by the second half of 2015. The company was in a proxy war with Carl Icahn. It rejected the idea of a split earlier.

Beat EPS estimates, but fell behind on revenue

A recent earnings report on Market Realist noted an earnings per share, or EPS, of $0.90 in 4Q14. In comparison, Amazon (AMZN) saw an EPS of $0.45. While eBay’s earnings beat estimates, revenue of $4.92 billion missed the street consensus. Amazon and Alibaba (BABA) beat EPS estimates for their latest results. 

The above report said investors can consider ETFs, like the Dow Jones Internet Index Fund (FDN), for portfolio exposure to eBay. This ETF has about 5.3% of its portfolio invested in eBay. Another ETF to consider for investing in the retail sector is the SPDR S&P Retail ETF (XRT). It has about 1.2% of its portfolio invested in Amazon. Read eBay reports 4Q14 earnings: Investors need to watch this company in 2015 to learn more about eBay.

eBay’s February same store sales fell

Recently, ChannelAdvisor noted that “eBay’s February same store sales came in at 5.1%, a decrease from January’s 6.8% and below the e-commerce growth rate of 15% as predicted by comScore.” Amazon posted February same store sales at 22.7%. This was a decline compared to 27% in January.

In the next part of this series, we’ll discuss Baupost Group’s updated position in Antero Resources.

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