CHICAGO, June 16, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: eBay Inc. (Nasdaq: EBAY),
GSI Commerce Inc. (Nasdaq: GSIC), Polo Ralph Lauren (NYSE: RL), Amazon.com
Inc. (Nasdaq: AMZN) and Google Inc. (Nasdaq: GOOG).
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Here are highlights from Wednesday's Analyst Blog:
eBay Settles GSI Investor Claims
E-commerce service provider, eBay Inc. (Nasdaq: EBAY) has
reached an agreement with GSI Commerce Inc. (Nasdaq: GSIC)
to settle claims made by shareholders of the latter. The claims,
which were related to eBay's proposed acquisition of GSI, had been
filed in the Delaware state
court.
Per the settlement terms, holders of GSI stock will receive
33 cents a share in addition to the
$29.25-a-share payment already agreed
to by eBay. The investors will get the settlement money after the
acquisition is wrapped up on June 17.
eBay had announced its intention to acquire GSI Commerce for
$2.4 billion ($29.25 per GSI share) back in March. Close on the
heels of the announcement, the merger was opposed by Southeastern
Pennsylvania Transportation Authority (Septa), which filed a
complaint in the Delaware Chancery
Court, stating that the offer made by eBay was a mere bargain
price.
Septa said that GSI Commerce, an e-commerce and marketing
services vendor to over 2,000 brands such as Toys "R" Us, the
National Football League and Polo Ralph
Lauren (NYSE: RL) was worth much more. The
transportation authority also stated that GSI Commerce appears
poised for double-digit growth in the future.
eBay is one of the largest online retailers in the world and
appears well positioned to grow through strategic acquisitions. The
company also reported a modest first quarter, with earnings of
40 cents per share coming in line
with the Zacks Consensus Estimate. Gross revenue of $2.55 billion improved 2.0% sequentially and
15.9% year over year, and also surpassed our expectation by 2.8%.
The quarter's revenue also came in at the high end of the company's
own guidance range of $2.4–$2.5
billion.
We believe the merger with GSI will help eBay to expand its
business and provide a competitive edge over Amazon.com Inc.
(Nasdaq: AMZN) and Google Inc. (Nasdaq: GOOG). However, GSI
acquisition cost, which has increased post settlement, could weigh
on the shares.
Though we anticipate that eBay's profitability will be aided by
higher volumes, increased costs and weaker pricing will hurt
margins.
We are maintaining our Neutral rating over the long term (6–12
months). Currently, eBay shares carry a Zacks #3 Rank, indicating a
short-term Hold recommendation.
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