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After Hours Action: Ebay

In after hours trade, shares of Ebay slipped as much as 7% even though the company slightly beat its forecast. Why did investors turn on this stock?

Profit came in at the low end of analysts' estimates, which disappointed investors, and guidance was weak. Investors were hoping to see better traffic and positive sales.

The results dashed investor hopes of a substantial turnaround at its main marketplaces division during the crucial holiday season.

"The size of the negative reaction is a bit surprising, says Bernstein analyst Jeff Lindsay. (Investors don’t like the) guidance which is a little bit less than consensus. (But) EBay has a long history of providing very conservative guidance and then beating it, but people were hoping for evidence of much more recovery.

What’s the trade?

If you’re long Ebay I’d pull rip cord, counsels Guy Adami. I think you can buy it cheaper, around $20.75.

Part of the stock’s sell off has to do with Ebay’s run-up ahead of earnings, adds Jim Goldman. It just wasn’t justified.





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Trader disclosure: On October 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (DIG), (MSFT), (AAPL), (BAC), (EWZ), (INTC); Najarian Owns (DE) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), (YHOO) Puts; Terranova Owns December Crude Oil Futures

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