It was a bad day for stock in general, but eBay had a double whammy.
eBay shares closed down 2.58% (89c) Thursday despite a late rally by NASDAQ listed stocks. The decline knocked $1 billion + off eBay’s market cap and follows a day where the eBay owned VOIP provider Skype remained crippled by a system wide outage.
The Skype outage is now approaching 18 hours (at the time of writing) with little information coming from Skype other than that the issue is related to “sign-on problems.” Skype earlier in the day was forced to deny rumors that their platform had either been hacked or subject to a cyber attack.
Some users have reported intermittent Skype service, with the service connecting then dropping after several minutes.
Maybe it’s because they’re “very afraid”…
http://blogs.zdnet.com/Stewart/?p=495
Yeah it’s been on and off all day, but not significantly up for any period.
It’s just painful– I love Skype, and for work today we tried Yahoo and MSN. Excruciating. They’ve got 9 hours before I get back to work, or there will be hell to pay.
Good luck, Skype, it’s stressful just knowing all the scrambling that must be going on behind the scenes.
It’s been working for me the last hour or so. Maybe the problem has been solved or their rolling it out now?
Eric,
I think you’re right– it’s a little slow to connect, but seems to be holding connections again. It is certainly better than in the morning. Nice.
LOL, that place going down the toilet soon! GOOG should do free auctions for a year and finsih them off!
Duncan, we are in the middle of a pretty serious correction in the markets. Just cause the Nasdaq made a late day rally, doesn’t mean all stocks on the composite (3,115 securities to be exact) would move. A drop of 2.5% isn’t all that bad considering the type of day we’ve had. Take a look at Google (down 1.21%), Yahoo (down 2.40%). Don’t get me wrong, the Skype downtime is a big deal and I did consider the short play, but it’s too early (in the downtime) to think the market would really care that much (considering everything else going on).
It won’t connect for me again as I type this, although it did seem up for a little while.
It is up for me now, and then off - 5 min on, 5 min off. Glad to see you linking out, albeit to Skype.
Just so I understand Duncan, are you suggesting that the $1 b market cap reduction was due to Skype down today?
It will be interesting once the truth is revealed about the actual problem Skype is having.
Ebay’s stock did nothing more than join all the ones I own. The past few weeks has been sad.
We’re running charts on Skype Journal showing the network coming back up. Connections remain intermittent, but millions of people are back online. http://skypejournal.com
Oh, and just how stupid do you think investors are? Skype represents such a small part of eBay’s cash flow, why would anyone discount the whole eBay family of companies because of a blip in Skype’s contribution?
Ouch, a $1B “blip” is hard to take on the chin — market correction or not. Sure the market is volatile right now but that doesn’t guarantee the $1B hit will recorrect to cross-cancel the drop.
Allen/ Phil
the failure of eBay to bounce towards the end of the day when the NASDAQ did (the red line in the chart) would seem to indicate that yes: there is a link. I checked the wires, although obviously the market is volatile at the moment (sub prime crisis etc..) there was no other adverse eBay publicity this day, and generally speaking eBay’s share price has followed the direction of the overall market previously.
BTW as at 9pm PST it’s been down again at least half an hour.
Let me venture a guess: user data were lost at Skype. I could not imagine other reason for not being able to bring application back up for such a long time. Hardware could have been replaced and software could have been reinstalled. I could picture Skype personnel running around, trying to restore data from backups which are oftentimes happen to be out of date or not easily recoverable….
If I am right, please give me a credit the follow up article
Lot of spinning on TC today,
1. eBay sees $1B market cap knocked off AS SKYPE OUTAGE CONTINUES
2. David Sifry refers to HIMSELF AS A GREAT LEADER
Is TC turning into Valleywag clone? Hope not.
There’s no link at all between these as far as I can tell.
A long time ago they invented the phrase “shit happens” and they haven’t seen a need to stop using this phrase. Outages happen, things break for no apparent reason. Yet the bone fish are still in season.
Skype will be back, and eBay will bounce back from this drop, and life will go on.
The hedge fund guys spent the entire day trying to figure out how they are going to hide this quarter’s losses from their LPs. Skype was not on their mind as they sold ebay and fled risk.
no offence but yahoo was down too, so was google, Expedia to Name a few. Market is to voliatile to even compare due to world wide unrest before any sound judgement can be made. Sorry
Guys, focus on the Skype outage rather than an analysis of the stock market. TC is fantastic at delivering breaking tech news. If I want to read about the correlation of the stock price and the stock market, I’ll read it on Silicon Alley Insider’s website (Henry Blodget of “tech bubble fame”).
btw- I like Vadim’s posting above - he may be correct. But, if this is correct where is/was the redundancy or is there no redundancy in a p2p environment, with respect to data back (i.e. username & passwords).
Bye bye OnState.
http://www.on-state.com/
How can you run a call center and be out for 18 hours? Ouch.
I guess that’s good news for TokBox.
Stockmarket’s going bezerk, Skype broken for hours on end, Twitter broken yet again (not that this is news) and Technorati was plonking yesterday.
What’s the world coming to!? Better run for cover, the sky is falling.
That’s gotta hurt. Come on Skype!
Will someone give Duncan a reality check? He seems to be the only person in the world left who thinks that
1. In the middle of a major market correction, with funds being forced to liquidate assets to meet redemptions, lack of credit and unwinding of carry trades, they are focused on a miniscule portion of Ebay’s business like skype. Is skype why Korea has been down 6% yesterday and now another 3% today? After all, they have some skype users.
2. Google really is paying 1 billion + to Myspace for advertising. Come on Duncan, you mention this often, but everyone in the valley knows that this is just PR.
3. High school projects deserve front page write ups on TC. I won’t even go into this one.
Michael, I know that you can’t write all the posts, but can you please give Duncan a clue on Reality 101 or give us a way to filter out his stuff … his posts are starting to get embarrasing to read.
Is this really the start of something more? I don’t wanna talk about bubbles…
I hope it isn’t.
Some other statistics graphs about the user distribution in skype can be found on http://85qm.de/archives/561-Sk.....-down.html
It is a market correction.
http://bootstrapeconomist.org/.....al-market/
That $1 Billion was just reality setting in after summer of hooey senselessness.
Really, does the future of Ebay, a site riddled with keyword spammers and out-of-control powersellers, in any different position now than it was 2 months ago, when got into this dust up with Google: (http://www.techcrunch.com/2007/06/13/ebay-stares-down-google-and-wins/)?
If anyone can explain why eBay didn’t follow the market please feel free to do so. The “market correction” as some put it (for the rest of us the Sub-Prime lending fiasco) has spooked the market and investors have become easily spooked over just about anything remotely negative. Bad news for eBay re Skype could and may well be the reason why there was a surge in late trading on eBay that saw the stock fail to bounce against the overall market. I’m not saying that it’s rational behavior, but the Skype outage is enough to spook investors in a market that has become overly wary of negative news. Interestingly that in early trading today eBay has reverted to following the market trend. Again, some one was spooked on eBay Thursday. If it was something else please share.
It’s funny, I’ve been trading and following eBay for the past couple months and they have been showing relative strength compared to other NASDAQ stocks.
Take a look at this chart, which shows eBay and DAQ with equal (3mo) performance at the beginning of August. Both stocks showed a 0% gain since late May.
Since then, eBay has had higher rallies and shallower pull backs. eBay is up 1% (over 3mo) while the DAQ is down 4%.
Yesterday, folks were buying the stocks that tanked since they looked like good values. Whereas eBay has been pretty level while everything else is dropping. So the vultures who were out yesterday ignored it. But I wouldn’t ignore it. As things turn around, people are going to flood into a stock like eBay that showed relative strength through this period and IMO is a good value buy.
Cheers.
And here is the chart I forgot to link to:
http://finance.yahoo.com/q/ta?.....;c=%5EIXIC
Skype still down, maybe we should patch in SkyNet and let it try to fix the bug. Oh wait, too late, it’s become self-aware.
@Duncan - The market is generally fragile right now because of the subprime crisis. Although it is targeted to one business segment, it has a big ripple effect. This is the easiest way for me to explain it:
subprime crisis —> home foreclosures —> higher home inventories —> lower market prices on homes
This will in turn affect “prime” borrowers, usually real estate developers who attempted to capitalize on the housing market. Many of their projects were analyzed on inflated housing prices, and as they fall, so do their margins.
That is the effect on the housing industry, but it spreads to other aspects of capital markets as well.
Sorry to digress a bit, but I am more than happy to answer any questions.
Dunca, the markets are skitso, they don’t need a reason to do anything. If I could tell you why any stock did or didn’t follow the market I’d be a very rich man.
I am an M&A analyst / writer for a technology focused financial blog called The Bootstrap Economist. I can do an analysis on eBay and post my thoughts — thank you for the idea.
Duncan, you said:
“If anyone can explain why eBay didn’t follow the market please feel free to do so. The “market correction” as some put it (for the rest of us the Sub-Prime lending fiasco) has spooked the market and investors have become easily spooked over just about anything remotely negative.”
eBay’s core business still carries the “fleabay” taint. An emerging sub-prime effect could ripple onto business segments and/or companies with similar perceptions about the viability of serving less-than-desirable consumers.
Skype is a small portion of eBay’s business, but represents the future. I can see how a tech crisis like Skype’s outage, perception about eBay as a company and a bad day in the market could result in a $1Bn value loss.
Crazy - 1 Billion over a days outage.
Oh dear not a great day for Ebay, but it does make you wonder why Ebay ever went public in the first place!!!
Its sad to see a company like skype suffer such problems.
Glad to know there are other good alternatives like http://www.jajah.coma nd http://www.zoippe.com
I’m a skype customer, but when skype is down, I need an alternative, so I look around and found webacall.com
I signed up, but does anyone have experience with them? Their voip rate is the cheapest I found thus far. I will still use skype, but a secondary back up wouldn’t hurt.
I guess its time to give other players a try and see how they fare:
Someone recommended me a US based company, called, DAMAKA. I downloaded their app yesterday and it has worked out really well for me. I have friends and business contacts in other parts of the world… so we needed to move on to some other app… damaka’s the one for me!
I have almost 75% of my buddies moved over to damaka…. except a few die-hard skype lovers, they all love this app. It has all the feature you will need at-work or at-home…
http://www.damaka.com
BTK
eBay bought up Skype… I heard they are considering buying Sentry (Sentrylogin.com), an online provider of PayPal Subscriptions member login for websites. Would be perfect fit, IMHO.