eBay 2004 Annual Report Download - page 61

‚ the need to implement controls, procedures and policies appropriate for a larger public company at
companies that prior to acquisition had lacked such controls, procedures and policies; and
‚ in some cases, the need to transition operations onto the existing eBay platform.
Foreign acquisitions involve special risks, including those related to integration of operations across
diÅerent cultures and languages, currency risks, and the particular economic, political, and regulatory risks
associated with speciÑc countries. Moreover, we may not realize the anticipated beneÑts of any or all of our
acquisitions. As a result of future acquisitions or mergers, we might need to issue additional equity securities,
spend our cash, or incur debt, contingent liabilities, or amortization expenses related to intangible assets, any
of which could reduce our proÑtability and harm our business.
Our stock price has been and may continue to be extremely volatile.
The trading price of our common stock has been and is likely to be extremely volatile and could Öuctuate
in response to a variety of factors, including the following:
‚ actual or anticipated variations in our quarterly operating results and expected future results;
‚ changes in, or failure to meet, Ñnancial estimates by securities analysts;
‚ unscheduled system downtime;
‚ additions or departures of key personnel;
‚ announcements of technological innovations or new services by us or our competitors;
‚ initiation of or developments in litigation aÅecting us;
‚ conditions or trends in the Internet and online commerce industries;
‚ changes in the market valuations of other Internet, online commerce, or technology companies;
‚ developments in regulation;
‚ announcements by us or our competitors of signiÑcant acquisitions, strategic partnerships, joint
ventures, new products or capital commitments;
‚ unanticipated economic or political events;
‚ sales of our common stock or other securities in the open market; and
‚ other events or factors, including those described in this ""Risk Factors That May AÅect Results of
Operations and Financial Condition'' section and others that may be beyond our control.
The trading prices of Internet stocks in general, and ours in particular, have experienced extreme price
and volume Öuctuations in recent periods. These Öuctuations often have been unrelated or disproportionate to
the operating performance of these companies. Even considering recent changes, the valuation of our stock
remains high based on conventional valuation standards such as price-to-earnings and price-to-sales ratios.
The trading price of our common stock has decreased sharply from its level in the fourth quarter in 2004, but
remains much higher than our stock price during 2002 and early 2003. This trading price and valuation may
not be sustained. Negative changes in the public's perception of the prospects of Internet or e-commerce or
technology companies have in the past and may in the future depress our stock price regardless of our results.
Other broad market and industry factors may decrease the market price of our common stock, regardless of
our operating performance. Market Öuctuations, as well as general political and economic conditions, such as
recession or interest rate or currency rate Öuctuations, also may decrease the market price of our common
stock. Securities class-action litigation is often instituted following declines in the market price of a company's
securities. Litigation of this type could result in substantial costs and a diversion of management's attention
and resources.
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