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“eBay Shares Surge to Highest Level in Three Years: Here’s Why”

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eBay Shares Surge as Meta Tests Marketplace Collaboration

Shares of online marketplace eBay (NASDAQ: EBAY) climbed to their highest levels in three years on Wednesday, fueled by an unexpected partnership. Meta Platforms (NASDAQ: META) is grappling with increased regulatory scrutiny in Europe. To address this, they are trialing eBay ads on Facebook Marketplace. By 11 a.m. ET, eBay’s stock had risen by 11% following this announcement.

Could This Be the Boost eBay Needs?

European regulators have raised concerns over the exclusivity of Facebook Marketplace. In response, Meta is testing eBay listings directly on its platform, as reported by Bloomberg. This move may satisfy regulators and represents a significant potential for eBay.

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eBay is one of the largest and most lucrative e-commerce companies globally. However, it has experienced stagnation in recent years. Metrics from the third quarter of 2024 show only 133 million active buyers, marking just a 1% increase from the previous year. Additionally, its merchandise volume rose by merely 2%.

Given Facebook’s expansive audience, eBay stands to benefit significantly if its listings are visible on Marketplace.

Is eBay a Low-Risk Buy Right Now?

It’s crucial to acknowledge that Facebook is only running a test; this might not yield substantial benefits for eBay in the long run. Nevertheless, there are positive implications for eBay shareholders.

Purchasing eBay stock today could be seen as a low-risk investment. The stock currently trades at just 18 times earnings, and the company boasts a robust balance sheet with profitable operations. Furthermore, eBay’s management is actively repurchasing shares and increasing dividends.

For these reasons, eBay stock merits consideration at this time. The potential downside appears limited, and successful integration with Facebook could ignite a return to growth.

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*Stock Advisor returns as of January 6, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool recommends eBay. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.

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