Monday, March 25, 2013

EBay shares slide ahead of analyst day

While eBay is usually "prudently cautious," investors may be nervous about what the company will set for expectations for the next two to three years, said Baird analyst Colin Sebastian, who has an "Outperform" rating on the stock.

Another possible concern, he added, could be the Senate's approval of a budget early Saturday that gives states more power to collect online sales taxes on purchases made from Internet companies in other states. That could hurt eBay, because its many small-time sellers might have a difficult time implementing tax collection into their sales practices.

Stifel Nicolaus analyst Jordan Rohan expects eBay to give 2015 guidance for earnings of $3.50 to $3.85 per share on revenue of $20 billion to $22 billion. On average, analysts polled by FactSet are expecting earnings of $3.74 per share on revenue of $21.4 billion.

Rohan also had a series of questions for eBay regarding its PayPal unit ahead of Thursday's analyst day. Concern over new fees that MasterCard and possibly other credit card companies plan to start charging has been hurting eBay stock in recent weeks, and Rohan said in a note to clients that he'd like details on how these fees will impact the profit margin on PayPal transactions.

The analyst also questioned why PayPal has only 5 percent of the mobile payments business, and said he would like to get an update on consumer use of PayPal at checkouts, and what incentives the company will offer to lure customers to use the service at retail stores. He also wants an update on the deal announced in August with Discover to enable merchants to accept PayPal easily. EBay said it is on track with the Discover plan to go live in the second quarter.

Rohan said the key to eBay's analyst day is whether the company gives guidance specific enough to beat investors' expectations. He said that eBay management is too smart to provide high-margin targets and instead will probably provide an outlook that is "just enough to keep shares steady while showing solid growth and market share gains in both marketplaces and payments."

He suggested that after the analyst day, investors will be comfortable with eBay's current stock price and be open to giving the San Jose, Calif., company some wiggle room so it can make investments for the future. Rohan kept a "Buy" rating and $63 price target on eBay shares.

Traditional banks are clearly at an advantage when it comes to cash transactions. Years ago they ceded ground by sharing credit transactions in doing deals with the likes of Visa and Mastercard.

But there is debate now on whether the use of cash is in decline. There is evidence that the value of cash withdrawals from ATMs has peaked. By contrast the value of credit and debt card purchases have grown from $176 billion 10 years ago to $408 billion today.

Mott says if one assumes cash withdrawals indicate cash payments, the value of card purchases is now 70 per cent of the total.

By way of further example, Coles estimates the value of cash sales is down from 45 per cent in 2007 to 33 per cent today. And the average value of cash transactions across the board is only $12.

But we are a long long way from a utopian cashless society. The ramifications for the banks can be good and bad - but Mott takes the view that it is potentially more negative than positive.

On the plus side, the ability for the banks to invest less in the branch and ATM infrastructure frees up capital expenditure and a reduction in handling cash also cuts some bank costs. On the negative side bank investment in technology may have to be increased to deal with systems to better facilitate mobile transactions.

Allowing a non-bank player into a threesome with the customer and bank could reduce the transaction fees earned by banks but encourage customers to become more agnostic in banking relationships.

The bottom line is that WWE knows that most of its fans are younger or casual ones who don’t read wrestling sites like this one. Therefore, the company feels like it can get away with what are obviously predictable storylines and matches because the average fan doesn’t view them as such.

Any fan who’s above 12 years old or who isn’t just a casual one, however, knows that the retirement stipulation that’s been added to Triple H vs. Lesnar is just a way to make it seem like a bigger deal when the lovable babyface inevitably overcomes the odds to beat the big bad heel.

I cannot say I blame WWE for doing this. WrestleMania 29 is shaping up to be awfully predictable and doesn’t have anywhere near the buzz that it should, so creating that buzz in any way possible is a logical move.

The GSA 28 “smart” autopilot servo is a brand new design developed specifically for the experimental market. Weighing only 1.4 pounds, it is over 40 percent lighter than most experimental autopilot servos. A gear train with engagement clutch and ability to back drive the brushless DC motor provide multiple levels of protection without the need to use a shear pin. The engagement clutch also decouples the motor from the flight controls, which minimizes the friction the pilot will feel when the autopilot is off. Each servo also provides a built-in interface to drive a customer-supplied trim servo. When the autopilot is off, the servo provides speed scheduling for the manual trim commands. When the autopilot is on, the servo automatically trims the aircraft to constantly keep it in trim. Plus, servo software updates are done over the CAN bus using the G3X SD card, eliminating the need to send the servo back to the manufacturer for updates.

With the optional GMC 305 autopilot control panel, pilots gain a dedicated autopilot user interface, as well as additional autopilot functionality including airspeed hold, independent flight director, and optional yaw damper. A control wheel integrated into the GMC 305 makes for easier pitch, vertical speed and airspeed adjustments. Plus, for added safety, the panel’s advanced Level (LVL) mode button commands the autopilot to help restore the aircraft to straight and level flight. And because the servos interface directly with the ADAHRS, the GMC 305 control panel allows for standalone operation of the autopilot in the unlikely event of a display loss.

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