E-bay is down from high of $118 a share earlier this month.
Today the stock dropped another $20.00 to $83 a share.

Shares of EBay Tumble on 'Red Flags'
By Lisa Baertlein, Reuters

SAN FRANCISCO (Reuters) - Shares of eBay Inc. posted their biggest one-day drop since November 2000 on Thursday after its quarterly profit missed Wall Street expectations for the first time and raised "red flags" about growth prospects at the online marketplace.
Compounding the blow was eBay's (EBAY.O) 2005 forecasts, which lowered expectations rather than bumping them up as usual.

Shares of the online bazaar, where sellers peddle everything from ski pants to private islands, fell 19 percent on Nasdaq.

"There are too many red flags," American Technology Research analyst Mark Mahaney said in a client note on Thursday, adding that eBay's earnings shortfall appeared to be its first ever.

Janco Partners analyst Martin Pyykkonen said in a note that eBay was "losing some near term mojo."

While eBay's performance was generally solid in its key fourth-quarter, U.S. and German markets were weaker than expected, suggesting that eBay's easiest growth opportunities could be drying up in its most established and traditional markets, said Pyykkonen, who has a $90 price target on the shares.

"It's not like it's hitting a wall. It's more like a deceleration," Pyykkonen said in an interview with Reuters.

He added that eBay's higher marketing spend suggested the company felt it needed to spend more money in core markets to get new buyers and sellers. The company has relied heavily on word of mouth so far.

"There is no historical precedent for a business like this," he said.

In a flurry of notes, analysts cited a swath of deteriorating fundamentals for Wednesday's miss, including slower overall user growth despite strong international pickup, higher-than-usual marketing costs, weaker-than-expected profits and soft international results.

Some called eBay's $100 million investment in China, which is not a profitable business, defensive while others defended it.

If eBay stumbles and there is serious resistance to coming price increases that will largely hit basic eBay Store users, Pyykkonen said sellers could begin to leave eBay, which now has a virtual lock the U.S. market.

Discount Web retailer Overstock.com (OSTK.O) has stepped up efforts to draw users to its new, and significantly smaller auction service and Web search advertising providers Google Inc. (GOOG.O) and Yahoo Inc. (YHOO.O) also could gain increased popularity with sellers.

Mark Herskovitz, portfolio manager for the $2.2 billion Dreyfus Premier Technology Growth fund, said: "I don't think the stock falling has anything to do with their business."

Herskovitz, whose fund owns both eBay and Yahoo (YHOO.O) shares, said eBay's sky-high valuation has been propped up by an unblemished record of exceeding expectations.

"It is bad news from a stock point of view, not a business one," he said.

Shares fell $19.72 to $83.33 on Nasdaq after hitting a session low of $81.40. (Additional reporting by Eric Auchard)