Ebay Inc has recently made an exciting announcement regarding its share buyback plan for the year 2020. The e-commerce giant is increasing its buyback program by $3 billion, bringing the total to an impressive $4.5 billion. This expansion comes hot on the heels of the successful sale of its StubHub ticketing unit.

In addition to the increased buyback plan, Ebay has also provided a positive forecast for its first-quarter adjusted profit. The company projects a profit between 72 cents and 75 cents, exceeding analysts’ expectations of 72 cents. This optimistic outlook can be attributed to the impact of share buybacks and strategic investment timing.

However, the sale of StubHub will have an offsetting impact on Ebay’s overall performance. In response to pressure from activist investors, Ebay sold StubHub to Viagogo Ltd for a whopping $4.05 billion in November 2019. While this divestment was a strategic move for the company, it will inevitably affect its financial position.

Looking at the bigger picture, Ebay has high hopes for the full year of 2020. The company expects to achieve a profit ranging from $3.00 to $3.10 per share, with the midpoint of this estimate surpassing market expectations. This positive outlook has already had a favorable impact on Ebay’s stock, as its shares rose 2.4% in after-hours trading following the announcement.

Overall, Ebay’s decision to expand its share buyback plan and its optimistic profit forecast for the first quarter showcases the company’s confidence in its future performance. By strategically utilizing share buybacks and making divestments, Ebay aims to drive growth and deliver value to its shareholders.

Useful links:

1. Reuters – Ebay increases share buyback plan

2. CNBC – Ebay forecasts higher first-quarter profit