• Jeff Matthews

Baby Boomers Remembering When

“Ebay’s profit jumped 10% and revenue soared 31%, but concerns remain about growth in its main U.S. auction marketplace.”

—Wall Street Journal

The single most depressing thing on TV has got to be those Public Television fund raising concerts featuring flabby, ancient, gray-haired singers or vocal groups or bands from the 1950’s or 1960’s or 1970’s playing their one or two or three hit songs to an audience of uniformly Middle-Aged White People sitting politely in their seats while cameras rove the theater for soft-focus close-ups of glassy-eyed individuals, their faces uplifted towards the stage, who are either singing along with the song (which is generally an exact duplication of the original recording) like a five-year-old at a Raffi concert, or mouthing the words silently, as if these were ancient biblical texts about the Sermon on the Mount as opposed to three-minute pop tunes about Big Girls who Don’t Cry or Puff the Magic Dragon.

This sounds harsher than I mean it, but what I see in those shows is not an uplifting mass rejuvenation thanks to the life-lessons of “little Jackie Paper” who “loved that rascal Puff.”

What I see in those shows are people from my demographic who’ve woken up suddenly to find themselves unequivocally old and are wondering where the time went, which is why they’re in a crowd of other 50 year-olds singing along to songs that were popular when they were young and vigorous instead of somewhere else experiencing something a little more current.

In short, they depress the hell out of me.

And not for nothing, but since I’d rather watch Alex Rodriguez stare at a called third strike and end yet another Yankees rally than witness a bunch of Baby Boomers re-experiencing their lost youth in order to replenish the coffers of Public Television, I never stick around long enough to write down the 1-800 Number.

I thought of the hidden message which, to me, lurks behind those televised fund-raisers after reading about eBay’s earnings in today’s Wall Street Journal—how else to account for the use of an active verb like “jump” to describe what was, after all, a measly 10% increase in earnings, than to attribute it to the good memories of what eBay used to be, rather than what it has become? eBay is, after all, no longer the strapping youth of its glory days, when revenue growth was 100% a year and operating margins were in the mid-30% range. In fact, revenue growth has been cut by two-thirds since then, while operating margins are down one-third. Furthermore, the “earnings” which “jumped” 10% this quarter were not technically earnings according to Generally Accepted Accounting Principles, in the sense of being revenues less costs.

They were, rather, “adjusted earnings”—earnings adjusted for various items deemed not relevant to the core business and therefore summarily excluded by management—which is a hangover from the Dot-Com Bubble days that many observers thought we had slept off.

In fact, according to my Bloomberg, eBay’s operating income under GAAP actually declined this quarter, from $356 million last year to $339 million this year.

But by using what I call “Earnings Adjusted for Yadda Yadda Yadda,” or “EAFYYY,” eBay was able to report that 10% “jump” lauded by the Journal and by investors bidding up the stock this morning, apparently relieved the news wasn’t worse.

Like the aging Boomers funding Public Television, however, eBay is no longer the revolutionary, anti-establishment entity it used to be, thanks to free and fast-growing alternative sales platforms such as Craig’s List and Google Base, not to mention the rise of paid search by which anybody with something to sell can reach a potential customer for pennies per click, without having to auction if off on eBay.

Still, floating through the mystic chords of memory among Wall Street’s Finest and their clients, there are, no doubt, understandably fond reminiscences of days gone by. The good news, as I see it, is that the YES Network replays all those Yankees games that Rodriguez cost us practically 24/7.


Jeff Matthews I Am Not Making This Up

© 2006 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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The content contained in this blog represents only the opinions of Mr. Matthews. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. The content herein is intended solely for the entertainment of the reader, and the author.

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