The Engagement Death Spiral Nobody's Talking About
Let me paint you a picture. I listed an item five days ago. Nothing exotic, brand new, fair price. The stats? 468 views, 34 watchers, 1 message. One.
If you've used eBay in the past decade, you know this is insane. This isn't just my experience—across the platform, sellers are screaming into the void with listings that get 0-10 views in a month unless they cough up at least 10% in promotion fees. The engagement is dead. The marketplace is dying. And yet, eBay just posted their best quarter in years.
The uncomfortable truth: eBay is systematically destroying long-term enterprise value while engineering short-term shareholder returns. They're not building a sustainable business; they're extracting maximum revenue from a decaying platform before the music stops. And I think there's a trade here. AND this is NOT just cope about unsold listings. This is about a company that has abandoned everything that made it successful and the market hasn't caught on yet.
The Trend-Chasing Chronicles: A Decade of Abandoning Identity
eBay hasn't innovated in ecommerce since their inception. Instead, they've lurched from trend to trend, each time implementing the worst aspects of their competitors while missing what actually makes those platforms work.
The Amazon Wannabe Phase
First, they desperately tried to become a massive ecommerce platform, switching to the Amazon model of dropshipping utter bullshit from China. Pages and pages of items from business sellers paying extortionate eBay promotion fees to appear higher on search. The peer-to-peer marketplace that built eBay got buried under algorithmic preference for promoted listings from dropshippers.
The StockX/GOAT Disaster
At the tail end of the hypebeast phase, eBay launched in-house item verification for sneakers and streetwear. Complete failure. They were rejecting 99% of items because fakes were so good and the "experts" eBay hired were completely unqualified to authenticate a pair of Off-White Nike Blazers or whatever the fuck. Thousands of people got scammed in the process. They quietly scaled this back after burning money and credibility.
The Vinted Catastrophe (Current)
This is the worst one by far. eBay has genuinely abandoned all that made them successful in favor of the whole "we make it so easy to sell on our platform" schtick that Vinted does well. But they've copied all the wrong parts.
Delivery Hell
eBay now doesn't let you choose your own delivery method—similar to Vinted, yet even worse. On Vinted, you can at least specify which delivery you'll offer as a seller and choose your preferred method as a buyer (Royal Mail vs InPost vs vomits in mouth Evri). On eBay, it all depends on parcel size:
- Small parcel < 2kg? Lucky you, you get Royal Mail.
- Medium parcel > 5kg? FUCK YOU, HERE IS EVRI. Good luck when your parcel is in the neighbour's trash can or held in customs for a year yet says "delivered."
- Large parcel > 10kg? I'm so sorry but DHL will collect it from you. They may arrive any day between 00:01-23:59 with absolutely no heads up, will ring your doorbell once, and won't even identify themselves. A shady character in a van will ring your door and say "I am here for the item." Who the FUCK are you mate? What happened to decorum and social grace? Am I going mad?
The Fee Shell Game
eBay now offers "no fees for sellers!" Hooray! NOT. They shifted to the Vinted model of "Buyer Protection Fee," so you the buyer still pay a fee and you the seller still have to price accordingly as though you were paying a fee. Lose-lose.
Missing the Actual Secret Sauce
Vinted has a social media "For You" page that relies heavily on their recommendation algorithm to reel in and hook buyers and keep them engaged. There were months where I was addicted to tweaking my Vinted algorithm to recommend me the most cracked deals on Arc'teryx jackets and Salomon shoes. eBay does not have that. They've adopted the worst components of Vinted without understanding what makes Vinted engaging.
GenAI Slop Session
"Background remover" that makes your item appear like it's floating in space. "AI descriptions"—genuinely, what is the need? A succinct description is all you need, not some garbage descriptive sell slop. I'd love to see their system prompt for that particular agent because it sucks so hard.
The Promotion Racket: From Marketplace to Ad Platform
Is everything just ads now? Is life genuinely that depressing that every single tech company is just an ad company?
eBay charges through the nose for ads. Their dynamic promotion hovers around 14-20% of the final item price—eating most people's margins. If you don't pay for this, they're so shady and will nuke your listing and all your other listings to the backrooms. It's genuinely insane. MADDENING.
Their next promotion tier is pay-per-click, which I don't even want to talk about.
Here's what's actually happening: eBay has transitioned from a marketplace that served buyers and sellers to an advertising platform that extracts rent from sellers who are held hostage by sunk costs and inventory. And here's the kicker—it's working. First-party advertising revenue hit $496 million in Q3 2025, up 25% year-over-year.
The Execution Problem: Building a Global Platform from Bangalore
Let me show you something. Here are eBay's current job openings by location:
Engineering Jobs:
- India: 153
- US: 42
- UK: 3
Product Management:
- India: 19
- US: 13
- Canada: 6
- UK: 1
Data Science:
- India: 17
- UK: 1
Design and UX:
- Canada: 5
- US: 4
The entire development organization is in India. With all due respect to the subcontinent and the lads in Bangalore, this explains the serious lack of innovation. They don't even use eBay in India—it's not a meaningful market there.
There must be such a serious divide between the trend analysts and project managers in the UK and US trying to chase Vinted, and the ENTIRE DEV TEAM BASED IN INDIA trying to build features for markets they don't understand and platforms they don't use.
This isn't about code quality—it's about product intuition, cultural context, and understanding user behavior. You cannot build a compelling Western consumer marketplace when your entire product development team operates in a completely different ecommerce ecosystem.
The Engagement Crisis vs. The Financial Reality
Here's where this gets interesting. Everything I've described is a disaster for users. Sellers are getting crushed, engagement is dead, the product is getting worse. And yet...
eBay Q3 2025 Financials (The Uncomfortable Truth)
- Revenue: $2.82B, up 9% YoY
- GMV (Gross Merchandise Volume): $20.1B, up 10% YoY
- Non-GAAP EPS: $1.36, up 14% YoY
- First-party advertising revenue: $496M, up 25% YoY
- Operating cash flow: $934M
- Share buybacks: $625M in Q3 alone
- Q4 guidance: 8-10% revenue growth
This is not a company in financial distress. This is a company executing a profitable, if soul-crushing, transition to an advertising-driven marketplace model.
The advertising revenue is particularly telling: that $525M in total ad revenue (2.6% of GMV) growing at 25% YoY represents exactly the dystopia I'm describing—and it's highly profitable. eBay has successfully monetized seller desperation.
What Jamie Iannone Wants You To Believe
Here's how Jamie Iannone, CEO of eBay, describes this situation:
"We're transforming the eBay experience through AI built on 30 years of unique insights, while enhancing trusted programs in shipping, live commerce and circular fashion. These innovations are deepening engagement with enthusiasts and positioning eBay for continued success as we reinvent the future of ecommerce."
"Deepening engagement with enthusiasts."
468 views. 34 watchers. 1 message.
The Macro Tailwind That eBay Can't Capture
Here's the paradox: economic conditions should be driving traffic to eBay. We all know the UK economy is regressing after 15 years of Tory austerity. Genuinely, nobody has any money to spend on anything. I buy and sell a wide variety of items and speak to people with businesses and retail stores from Kings Road to Coal Drops Yard to Harringay Green Lanes. Across the board, people are spending less—especially the shrinking middle class and beaten-down working class.
Even the wealthy, with their assets across equities (SPY up 14.95% YTD), gold (up 56.01% YTD), silver (up 76.09% YTD), and UK house prices (up 3.0% YTD), are the quickest to tighten their purse strings at the first sign of recession.
Economic stress should be driving consumers to secondhand marketplaces. This should be eBay's moment. But they're not equipped to capture it. Their main competition—Vinted—is perfectly positioned to benefit from this windfall with their algorithmic engagement, simplified user experience, and actual community features.
eBay spent a decade alienating their core user base right before the moment when economic conditions would have delivered them a massive captive audience.
The Short Thesis: Betting Against Inertia
So here's the trade idea. And I want to be clear: this is a long-dated, high-conviction short on user experience translating to financial decline, not a quarterly earnings momentum play.
The Position
Long-dated near-ATM PUT option: $85 strike, January 2027 expiration
Current price at time of writing: $84.43 (market close, November 13, 2025)
Why this structure?
- Near-ATM positioning: Strike slightly above current price ($84.43) provides immediate theta decay benefit if thesis plays out
- Long duration: 2+ years allows time for engagement decay to show up in financials
- Options over short shares: Defined risk, no borrowing costs, no margin calls during irrational rallies
Why This Could Work
- The engagement metrics are leading indicators that haven't hit financials yet
- Vinted competition is accelerating in eBay's core markets
- The ad model has limits—you can only extract so much before sellers leave
- User experience decay compounds—every bad Evri delivery experience loses a buyer permanently
- The macro tailwind is getting captured by competitors, not eBay
Why This Could Fail (Risk Factors)
Let's be brutally honest about what could go wrong:
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The market can stay irrational longer than you can stay solvent. eBay could milk this ad model for 3-5 years before decay shows in financials.
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Share buybacks prop up the stock. With $1.4B in remaining buyback authorization and strong cash flow, management can engineer EPS growth and support the share price even as the business deteriorates.
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Sentiment favors value. eBay trades at approximately 12-13x forward P/E, making it look cheap relative to tech comps. Value investors might keep buying the dip.
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They could actually fix the product. Low probability, but not zero. New management or activist pressure could force real changes.
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Economic stress could paradoxically help eBay if consumers prioritize price over experience and the platform becomes the "last resort" for cheap goods.
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GMV growth continues. Even with worse user experience, overall transaction volume is up 10% YoY. The business is growing, even if it's hollowed out.
Hedging the Position: Complex Strategies
This shouldn't be a naked directional bet. Here are hedging considerations:
Hedge 1: Long Discount Retailers If reduced consumer spending pushes people to value platforms, hedge with companies that benefit from trading down:
- Long COST (Costco) calls: Consumers shift to bulk buying and value. Strike around current ATM, similar January 2027 expiration.
- Long TGT (Target) calls: Middle-market value retailer that captures "I can't afford premium but won't shop at Walmart" consumers
Hedge 2: Tech Sector Protection If the broader market or tech sector rallies, your eBay puts could get steamrolled even if the thesis plays out:
- Small long QQQ or XLK position: Provides some offset if rising tide lifts all boats
- Ratio spread: Sell some OTM calls on eBay to finance put purchases (but this caps upside if you're wrong)
Hedge 3: Competitor Exposure If the thesis is "eBay is losing to better competitors," bet on the winners:
- Long ETSY: Another marketplace that's better at community and curation
- Long RVLV (Revolve): Apparel marketplace with better engagement (if thesis extends to fashion)
- Vinted isn't public, or we'd long that directly
Position Sizing
This should be 1-3% of portfolio maximum. This is a contrarian, long-duration bet against a profitable company with strong cash flow. It's a thesis about future decay, not current reality. The financials do NOT currently support this trade—you're betting they will in 12-24 months.
The Uncomfortable Conclusion
eBay is executing a near-perfect financial engineering strategy. They're:
- Growing revenue through ads (25% YoY)
- Maintaining margins (27% operating margin)
- Returning massive cash to shareholders ($625M buybacks in one quarter)
- Reducing share count (supporting EPS)
- Guiding conservatively and beating
From a shareholder value perspective, management is winning.
But they're doing it by burning down long-term enterprise value. They're alienating sellers with promotion extortion, alienating buyers with shitty delivery experiences, losing market share to better products, and making zero meaningful innovations.
The question isn't whether eBay is deteriorating—it objectively is. The question is: when do the financial markets care?
Maybe in Q4 2026, GMV goes negative for the first time. Maybe in 2027, a major seller exodus gets publicized. Maybe advertising revenue peaks as there aren't enough quality listings left to promote. Maybe Vinted goes public and the comparison becomes stark.
Or maybe eBay continues extracting value from a shrinking moat for another five years, and this trade bleeds slowly before eventually being right.
Disclaimer
This is not financial advice. I'm some person on the internet who's mad about Evri deliveries and wrote a blog post. I could be completely wrong. Do your own research. Options can expire worthless. You can lose 100% of your investment. Past performance doesn't predict future results. The market can remain irrational longer than you can remain solvent.
Seriously, if you're taking trade ideas from someone who opens with "468 views, 34 watchers, 1 message," maybe reconsider your process.
But also... those ARE the stats. And eBay IS dying from the inside while looking healthy on a spreadsheet. Make of that what you will.
Written November 2025. eBay stock price at time of writing: $84.43 (November 13, 2025 close). Financial data sourced from eBay Q3 2025 earnings release.