Key Points:
- eBay will acquire fashion app Depop from Etsy for $1.2 billion.
- The company forecasts first-quarter revenue between $3 billion and $3.05 billion.
- Shares jumped 7% in extended trading following the announcement.
- eBay continues to focus on “recommerce” and luxury goods to compete.
eBay delivered a double dose of good news to investors on Wednesday. The e-commerce veteran predicted stronger-than-expected sales for the start of the year and announced a major deal to acquire the fashion marketplace Depop from Etsy. The purchase price sits at nearly $1.2 billion.
Wall Street reacted immediately to the update. EBay shares climbed 7% in extended trading. This jump adds to a strong run for the San Jose-based company, which saw its stock value rise by 40% throughout last year. Investors seem confident that the company is making the right moves to navigate a difficult retail environment.
The acquisition of Depop is a strategic play to capture a younger audience. Depop is incredibly popular with Gen Z shoppers who treat used clothing as a style statement. By buying the app, eBay deepens its reach into the “pre-loved” fashion world. Management stated that Depop has “strong momentum,” making it a perfect fit for eBay’s current direction.
Financially, the outlook is bright. EBay told investors to expect first-quarter revenue between $3 billion and $3.05 billion. This forecast beats the average analyst estimate of $2.80 billion by a wide margin. It suggests that despite a shaky economy, people are still buying and selling heavily on the platform.
EBay has spent recent years carving out a specific niche. Rather than trying to sell everything new like Amazon, they focus on “recommerce.” This strategy emphasizes pre-owned goods, refurbished electronics, and authenticated luxury items like sneakers and watches. They also dominate specialty categories like auto parts.
Buying from Depop reinforces this circular economy strategy. It allows eBay to dominate one of the most dynamic areas of resale: trendy, secondhand fashion. For Etsy, selling Depop marks a significant shift, unloading an asset they acquired just a few years ago.
The move shows that eBay is serious about staying relevant. By combining its massive infrastructure with Depop’s cool factor, the company aims to secure the next generation of online shoppers while keeping its current investors happy with solid financial returns.
