eBay Inc. (NASDAQ: EBAY) experienced a significant decline on Friday, with shares sliding 5.3% to close at $97.94. The drop came as the online marketplace faces heightened regulatory scrutiny over its proposed $1.2 billion acquisition of Depop, a London-based fashion resale platform, and as investors brace for the company's first-quarter earnings report scheduled for April 29.
The UK's Competition and Markets Authority (CMA) opened a merger case file on April 23 concerning eBay's acquisition of Depop. While the regulator has not yet initiated a formal Phase 1 investigation, it has set a May 8 deadline for public comments on the deal. This regulatory review introduces uncertainty around the timeline and potential conditions for the acquisition's completion.
Trading volume for eBay shares on Friday exceeded recent averages, reflecting heightened investor attention. The stock now sits approximately 8.8% below its 52-week high, which was reached earlier this week. The broader market, meanwhile, moved higher, with the S&P 500 gaining 0.8% and Amazon.com Inc. (NASDAQ: AMZN) rising 3.5% on the same day, underscoring eBay's relative underperformance.
Investor focus is now shifting to eBay's first-quarter 2026 earnings call, scheduled for April 29 at 2:30 p.m. PT (5:30 p.m. ET). Management is expected to field questions on marketplace demand trends, advertising revenue performance, and the timeline for the Depop acquisition. In February, eBay announced the deal to acquire Depop from Etsy Inc. for approximately $1.2 billion in cash, aiming to capture younger consumers through the booming secondhand fashion market. Depop reported nearly $1 billion in gross merchandise sales in 2025, with 7 million active buyers and over 3 million active sellers, of which nearly 90% are under the age of 34.
eBay CEO Jamie Iannone has positioned the acquisition as a strategic move into the 'pre-loved' apparel segment. 'The younger generation is very focused on pre-loved apparel,' Iannone told Reuters in February, adding that Depop is expected to strengthen eBay's position in the resale fashion market. However, the deal faces regulatory hurdles not only in the UK but also in Australia, where the competition regulator is reviewing the transaction with a Phase 1 review deadline of May 19.
Cost-cutting measures are also on the agenda. In February, eBay announced it would eliminate approximately 800 positions, or about 6% of its full-time staff, as part of efforts to align its workforce with strategic priorities following the Depop deal. This restructuring is part of a broader push to improve operational efficiency amid uncertain macroeconomic conditions.
Analysts have offered mixed views on eBay's near-term prospects. Cantor Fitzgerald's Deepak Mathivanan raised the price target on eBay shares to $100 from $90, maintaining a Neutral rating. His note cited steady first-quarter e-commerce demand that appears roughly in line with or slightly above expectations. However, he expressed caution regarding second-quarter guidance, pointing to macroeconomic and trade uncertainties that could weigh on performance.
eBay's most recent quarterly results showed some positive momentum. Fourth-quarter revenue climbed 15% year-over-year to $3.0 billion, while gross merchandise value (GMV), representing the total value of all paid transactions, increased 10% to $21.2 billion. For the first quarter, the company has guided revenue in the range of $3.00 billion to $3.05 billion, with adjusted non-GAAP earnings per share between $1.53 and $1.59.
The regulatory reviews in the UK and Australia introduce a risk of delay or potential conditions on the Depop acquisition. While there is no guarantee the deal will be blocked, the scrutiny adds uncertainty for investors who are weighing the strategic benefits against regulatory and margin pressures. Friday's stock decline suggests the market is not yet ready to reward eBay for the Depop move, preferring to wait for clearer evidence of growth and regulatory resolution.
