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EBAY JUST GOT CRAZIER!

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Dr freedom
Posted: Thu Oct 30, 2014 11:17 pm Reply with quote
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Joined: 11 Aug 2011 Posts: 2149 Location: Hell
Smittygrind75 wrote:
slob-air wrote:
And then there's their Paypal fees too.



I can't believe they haven't been investigated and broke up yet.


They're seperating willingly. Primarily because paypal can't adapt as quickly as other payments services like Apple pay. They have to take eBay into consideration before making any moves. I don't see how it'll benefit anyone but themselves, of course.

Apple Pay is currently struggling to get companies outside of the minimal within the US who have signed up for its system, for now.
If you read the article though, it mentions that its a separation for 2 reasons.
Firstly is that Paypal & its value alone is higher than it is being tied to Ebay (common knowledge that one), secondly is to combat the onslaught that the new systems, Apple & Google, are now out in the market with & pushing, logical.
There is no doubt that the 'pay with your phone' way is coming in the short to medium, so the growth of retailers that will take up the Apple option, Google & Paypal is set to grow exponentially.
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willymaze20five
Posted: Fri Oct 31, 2014 12:55 am Reply with quote
Joined: 20 Dec 2005 Posts: 6938 Location: San Diego
Damn :-/

eBay has gotten worse n worse ....I think the good ole days were 2007- 2008-ish & below

Seems like they had this planned out, Get everyone use to it & then slowly raise the fee's.

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Dr freedom
Posted: Fri Oct 31, 2014 7:09 am Reply with quote
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The fee hikes are to do with their credit rating. Moodys (one of the worlds big 3 credit rating agencies) have downgraded it because of the split.
Moodys ratings review says that the splitting of ebay & Paypal will result in a smaller weaker credit profile than it does as combined & because the current debt will remain with ebay, its rating has fallen.

In lamens terms, the companies credit rating (much like the personal credit rating everyone has) has dropped. The difference is when you are a multinational company with share holders & a low credit rating, the cheap money you can borrow from an institution isnt available to you & you have to borrow from the more expensive institutions.

You will have all heard about your state/ countries credit rating being A or AA or AAA, the more A's, the greater access to the cheaper money you can borrow, less A's means when you borrow, the rates will be more expensive.
Ebay is on the move to bump up its rating.
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slob-air
Posted: Fri Oct 31, 2014 7:40 am Reply with quote
Site Admin Joined: 27 Oct 2001 Posts: 63453 Location: S&B HQ
Dr freedom wrote:

In lamens terms, the companies credit rating (much like the personal credit rating everyone has) has dropped. The difference is when you are a multinational company with share holders & a low credit rating, the cheap money you can borrow from an institution isnt available to you & you have to borrow from the more expensive institutions.


Does Ebay even need to borrow money though?

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Dr freedom
Posted: Sat Nov 01, 2014 12:32 am Reply with quote
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slob-air wrote:
Dr freedom wrote:

In lamens terms, the companies credit rating (much like the personal credit rating everyone has) has dropped. The difference is when you are a multinational company with share holders & a low credit rating, the cheap money you can borrow from an institution isnt available to you & you have to borrow from the more expensive institutions.


Does Ebay even need to borrow money though?

Yes & no. You need to have credit availability & that rating you carry is as powerful as already having monies itself.
The main reason a company like Ebay or Apple or BHP or Adobe would still borrow is because the cash they already have on hand is earning more in terms of interest being invested in the various forms you can invest into, as opposed to using the cash & spending it.

Heres an article from earlier in the year you might find interesting.
http://www.bloomberg.com/news/2013-04-24/apple-s-145-billion-in-cash-fails-to-win-aaa-debt-rating.html
The key point if its is this line
"Apple, which has $145 billion of cash, said yesterday it plans to use debt to help finance a $100 billion capital reward for shareholders"
As you can see, despite having all that cash, they still require a top notch credit rating because they can use an institutions money at a cheaper rate, than it will cost them to dip into the cash they already have. (the reasons an company borrows is obviously various & not just for a stakeholder dividend)
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