EBay shares down 11 percent before earnings
SAN FRANCISCO (Reuters) - Shares of eBay Inc (EBAY.O) fell as much as 11 percent on Wednesday on fears that a global recession would take a heavier toll on its online auctions business.
EBay was due to report quarterly results later in the day, though similar concerns also hit web rival Amazon.com (AMZN.O), which also fell 11 percent. Both took a deeper hit than the Dow Jones Retail Index .DJUSRT, which was down 4.5 percent.
Wall Street will be looking to see whether the financial crisis prompts San Jose, California-based eBay to lower its outlook for the fourth quarter and year.
"If they take guidance down, that's the pivotal issue for us," Bernstein Research's Jeffrey Lindsay said. "All that matters now is what they say about the fourth quarter."
EBay has been trying a host of measures to revitalize growth in its main business of auctions, but the Internet giant acknowledged last week that the weak economy was taking a toll.
It warned then that third-quarter revenue would be at the low end of a previous forecast and said it planned to cut 10 percent of its staff.
EBay shares were down $1.88 at $15.86 in early afternoon trading after hitting a low of $15.73 earlier in the session.
(Reporting by Alexandria Sage; Editing by Derek Caney)
