Stock Watch: Is eBay In Trouble?

On a day when most Internet stocks saw gains, leading auction site eBay (Nasdaq: EBAY) fell 4-1/16 to 134-3/16 on Thursday.

eBay’s stock has been in favor in previous quarters because the company is one of the rare Internet companies that is turning a profit. However, eBay’s status as a profitable company might now be in jeopardy.

eBay’s recent costly outage problems could mean that the company won’t turn in a profit in the quarter that just ended. The company has said that the major outage it suffered last month will cut its revenues by $3 million (US$) to $5 million in the quarter. Thursday’s stock decline was partially triggered by a story in the Wall Street Journal that touched on concerns about eBay’s second-quarter earnings.

Whether or not eBay turns a profit, it’s obvious that the site’s technical problems are giving eBay’s investors a lingering headache. However, despite the fact that eBay’s stock is about 100 points off of its all-time high, it’s still the dominant player in online auctions. If eBay can permanently end its outage problems — and that’s a big if — the stock could have a lot of upside.

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