All products featured on WIRED are independently selected by our editors. However, we may receive compensation from retailers and/or from purchases of products through these links.
Shares of eBay skyrocketed as much as 44 percent on Monday, amid increasing optimism that the online auctioneer will grab more of the nascent market and post higher profits.
Jamie Kiggen, analyst at Donaldson, Lufkin & Jenrette, issued an optimistic report on Monday that initiated coverage of the San Jose, California, company. Kiggen's report said eBay's (EBAY) stock price could raise to as high as US$100 in six to 12 months. Kiggen issued a "buy" rating. DLJ is also an underwriter of the stock.
"EBay displays all of the characteristics of an Internet category leader: a huge market opportunity, significant competitive barriers, an increasing returns business model, and a massive, loyal, and growing customer base," Kiggen wrote in his report.
Shares of eBay, based in San Jose, California, were up $19.56 at $69.68 in late afternoon Nasdaq trading. Earlier, the shares traded as high as $72. The stock was among the most active on Nasdaq.
EBay's quarterly earnings ended 30 September are due out after the close on Tuesday. Wall Street expects eBay to earn 3 cents a share.
Kiggen and his co-authors are predicting the company -– which went public only last month -- will be a "core Internet holding" and compared eBay to such Internet bellwethers as America Online, Yahoo, and Amazon.com.
"We like to think of eBay as Yahoo without the salespeople," he wrote.
Kiggen praised eBay's operating model, and noted that eBay achieved an operating margin -- a measure of how much profit the company makes from each dollar of sales -- of 36 percent during the first half of 1998.
