Tech

Jeff Bezos snubbed eBay in his annual shareholder letter, sending the stock sliding

Key Points
  • Shares of eBay fall 5% on Thursday, after Jeff Bezos snubs the rival e-commerce giant in his annual letter to shareholders.
  • In the letter, the Amazon chief executive compares the growth in merchandise sales of third-party sellers between Amazon and eBay from 1999 to 2018. His comparison shows that Amazon clearly outperforms its rival.
  • In response, eBay CEO Devin Wenig takes to Twitter to defend his company.
Jeff Bezos
Getty Images

Shares of eBay fell nearly 5% on Thursday, after Amazon CEO Jeff Bezos snubbed the rival e-commerce giant in his annual letter to shareholders.

In the letter, Bezos compared the growth in merchandise sales of third-party sellers between Amazon and eBay from 1999 to 2018. His comparison showed that Amazon has clearly outperformed its rival.

"Third-party sales have grown from $0.1 billion to $160 billion — a compound annual growth rate of 52%. To provide an external benchmark, eBay's gross merchandise sales in that period have grown at a compound rate of 20%, from $2.8 billion to $95 billion," said Bezos.

VIDEO1:4701:47
Jeff Bezos challenges competitors to match its employee pay, benefits

EBay's shares slid to $36.00 on Thursday afternoon. Its market cap was $32.94 billion.

Bezos cited the Fulfillment by Amazon and Prime memberships as the company's two "very best selling tools" to secure Amazon's success with third-party sellers over rivals such as eBay.

"We invested in both of these programs at significant financial risk and after much internal debate," Bezos said in the letter. "We could not foresee with certainty what those programs would eventually look like, let alone whether they would succeed, but they were pushed forward with intuition and heart, and nourished with optimism."

In response, eBay CEO Devin Wenig took to Twitter to defend the company.

"While I appreciate the ink dedicated to @ebay from the ceo of the company not focused on competition, think I"ll dedicate my letter to customers, purpose and strategy. We don't compete with our sellers. We don't bundle endless services to create barriers to competition."

Bezos also challenged rival retailers to match Amazon's minimum wage of $15 per hour. Bezos did not call out competitors by name, but it prompted a response from Walmart's executive vice president of corporate affairs, Dan Bartlett, who challenged Amazon to pay more taxes.

Read Bezos' 2018 annual letter here.

VIDEO1:3701:37
Jeff Bezos keeps control of Amazon in his divorce agreement