It did not take very long did it? Only a few days after closing out a trade where I was long Ebay, I’m ready to go long once again on the stock. Ebay’s electronic payment unit Paypal is looking more attractive each week and recent announcements that Paypal would be used by Facebook but also used in a new Peer to Peer payment system on the Iphone could mean a lot more business for the company. The main aspect about Paypal is that it has no real competition to speak of. There are alternatives but they are not as widely used and none looks like a credible threat to Paypal at the moment. It is also making a push to improve its growth in Asia, seen as a key area in the future of the company.
Regular readers know that I am not a huge fan of IAC Interactive and most other web content conglomerates. I do not have a specific reason to short IAC Interactive (IACI) right now apart from the fact that based on valuations they do look expensive. I also do not think their financial performance warrants such a high return so far this year (stock is up over 18% YTD).
Is Ebay the perfect story? No, but going long Ebay against IACI seems like the perfect trade right now and so I stand ready to push ahead.