Problem for who exactly? This isn't a local newspaper being swallowed up and then gutted by some faceless private equity group, which would be detrimental to the public interest. It's a multi-billion dollar business changing hands between two well-heeled megacorps.
Problem for Ebay, which is why they were forced to consider the sale at all. Elliot and Starboard are two of the biggest agitator investors out there, and together they’re formidable. You really don't want them owning a large percentage of your stock unless you want problems.
Another way to look at it is that Elliot & Co have a good track record of raising stock prices, so as a shareholder you actually do want them on board.
What is the long term if not the sum of the short terms?
“Short term bad long term good” is a convenient argument for management in a dispute with shareholders. It allows them to discard the objective measure of their performance in favor of speculation. Ignore the years of stagnant growth and keep paying each of us millions, says management! Our plan is a long-term one, you see.
Short term is greedy optimization. You get stuck in a local minimum, which may - and often is - be a very bad one, compared to other minima you could reach if you had a more long-term approach.
Short term in terms of certain private equity groups getting involved = company gets strip-mined for all its worth and its empty husk is discarded.
Can we step back and agree about our terminology? I'd say that short term is up to a year or so. Most PE plays I've heard about are years-long endeavors.
If this is true, why does the share price go up? Who is buying the stock after the short-term play? Is the market just dumb, and the only people who know the truth are the disgruntled-ex management who complain to the media about short-termism?
My perspective is that activist actions do incur some risk but have positive expected value in the long run. There are horror stories, but overall they create value, which is why people continue to invest in them.
I agree it’s possible to get stuck in local optima, but it’s awfully convenient for many CEOs to be in that situation. I suppose everyone who isn’t already running a trillion dollar company is in a local optima, if you think about it. It’s hard to blame shareholders for getting fed up after enough years of that and saying enough is enough, maybe you aren’t ever going to climb the mountain and should go to that local optima instead.
Indeed, I didn't think this was a good move until I found that eBay owns Kijiji. I'm also Canadian and I'm pretty sure Kijiji is way more popular for private buy/sell than Craigslist - at least anecdotally from the people I know.
This article from The NY Times explains why Kijiji took off in Canada faster than its parent eBay. In addition, when Kijiji first started, Craigslist did not have a French version of their site for the Montreal/Quebec market, which Kijiji did.
"A fundamental problem for eBay in Canada, Mr. Shiau said, is that Canadians generally do not like auction-based pricing. On top of that, Ms. Bannister (Head of eBay Canada) found that because Canada’s vast geography and low population density make shipping costs high and delivery times long, buyers of secondhand goods preferred to make deals in person.
To Ms. Bannister, the answer for eBay seemed to be online classified ads. At the head office, however, the idea did not appear to be quite so obvious. At the time, about 10 percent of Canadians used Craigslist, a level many eBay executives thought meant that it was fully entrenched. Nevertheless, they gave Ms. Bannister some classifieds site software being developed for Europe along with a small amount of money to adapt the site and market the result."
Wow. This is very surprising for me. I only knew of the ebay-kleinanzeigen.de sites in the German webspace, and those don't seem worth anywhere near that much. Technology and design seem to be out of the 2000s and it should be really easy to replicate.
It's easy to replicate design and technology. It's extremely difficult to achieve such a high equilibrium of sellers & buyers on the platform. These businesses benefit extremely well of network effects, creating high barriers of entry.
I've had the same eBay account since 2001 and used it countless times over the years, and yet today I learned not only do they have a classified ads division, but also that it's so prominent that it sold for $9b. Interesting.
Kikiji is so inferior to Craigslist... never understood kijiji managed to be THE classifieds in Canada. I guess lots of marketing in the beginning to bootstrap a network effect.
Kijiji covers the entire country including rural areas. Craigslist only covers large cities. Craigslist is useless to anyone who doesn't live near a large city. Also, in my opinion, Kijiji has a better UI and search capabilities.
It's 60% owned by Schibsted, one of the largest media conglomerates hailing from the Nordics. They recently spun out their non-Nordic classifieds into a subsidiary and listed it onto the Oslo Stock Exchange.
I hope this creates some incentive to make the website feel less abandoned. The German version is a huge pain to use, presumably because they wanted to push the main site (pay the commission, get better service).
Nope they have a large product and tech org looking after the German sites. It’s just kinda what happens for some reason. Check out olx or other adevinta destinations. Once you crack the buyer seller side of things life gets really comfortable
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[ 3.1 ms ] story [ 75.4 ms ] threadWell there's your problem.
“Short term bad long term good” is a convenient argument for management in a dispute with shareholders. It allows them to discard the objective measure of their performance in favor of speculation. Ignore the years of stagnant growth and keep paying each of us millions, says management! Our plan is a long-term one, you see.
Short term in terms of certain private equity groups getting involved = company gets strip-mined for all its worth and its empty husk is discarded.
My perspective is that activist actions do incur some risk but have positive expected value in the long run. There are horror stories, but overall they create value, which is why people continue to invest in them.
I agree it’s possible to get stuck in local optima, but it’s awfully convenient for many CEOs to be in that situation. I suppose everyone who isn’t already running a trillion dollar company is in a local optima, if you think about it. It’s hard to blame shareholders for getting fed up after enough years of that and saying enough is enough, maybe you aren’t ever going to climb the mountain and should go to that local optima instead.
"A fundamental problem for eBay in Canada, Mr. Shiau said, is that Canadians generally do not like auction-based pricing. On top of that, Ms. Bannister (Head of eBay Canada) found that because Canada’s vast geography and low population density make shipping costs high and delivery times long, buyers of secondhand goods preferred to make deals in person.
To Ms. Bannister, the answer for eBay seemed to be online classified ads. At the head office, however, the idea did not appear to be quite so obvious. At the time, about 10 percent of Canadians used Craigslist, a level many eBay executives thought meant that it was fully entrenched. Nevertheless, they gave Ms. Bannister some classifieds site software being developed for Europe along with a small amount of money to adapt the site and market the result."
https://www.nytimes.com/2015/05/18/technology/kijiji-a-flop-...
For all of its independence, I think craigslist missed a huge opportunity to improve fairness and quality in housing across the US.
Only recently did they implement some mild feedback rating system.
Probably a good time to sell for eBay, since a lot of classified ads are moving to FB Marketplace.
https://schibsted.com/about/who-we-are/adevinta-a-schibsted-... https://en.wikipedia.org/wiki/Schibsted