Invested $100 in eBay Stock Almost 30 Years Ago? It Would Be Over $9K Today
Written by
J. Arky
Edited by
Zuri Anderson
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Do you ever wish you could go back in time and invest in a company that got big? Some companies, which seemed like nothing back in the day, are now worth millions and sometimes billions.
One of those success stories is eBay, a pioneer in online selling when it launched in 1995. Since then, the company has gone through a lot of changes, including what its stock is worth today.
GOBankingRates spoke with Scott Ritchie of Stoculator to find out what putting $100 into eBay stock nearly 30 years ago would yield today.
How Much Is the Stock Worth Today?
“The first calculation starts from September 1998, which is when eBay went public. One thing to keep in mind here is that ebay acquired Paypal in 2002,” Ritchie noted.
“However, PayPal eventually outgrew eBay in value and the board decided to separate them in 2015. The spin-off was completed in July 2015, and investors received one share of PayPal for each share of eBay they owned.”
He explained that these calculations and any eBay stock price chart that are seen online today have been adjusted under the assumption that investors sold the PayPal shares they received and used the proceeds to purchase eBay shares. But everything started the day eBay went public late September 1998 and the price on the day of the IPO was $0.79 at the close.
“Since this was during the dot-com bubble, by the end of December, the stock price was more than five times higher, reaching $4.23 per share,” shared Ritchie. “By April 1999, the share price was close to $11. Exactly a year after the IPO, eBay was added to the Nasdaq 100 index. If you invested $100 in the stock at the time of the IPO, you’d have $9,301.78 today, according to Stoculator’s stock calculator. That’s an 18.79% annual return rate.”
What If You Invested in 2000, 2005 or 2010?
“If you invested at the beginning of the year 2000, you’d have $985.06 today, implying an annual return rate of 9.56%. Then in 2005, the price reached $24, and if you invested $100 at the time, you’d have $304.83, getting you only 5.72% each year,” according to Ritchie.
Outside of the IPO, eBay might not look like a wise investment at the time. Investing in the company was risky, but its valuation, due to the nature of it being a tech company, was incredibly high.
“In the beginning of 2005, eBay was trading at a P/E ratio that was close to 100. Unfortunately, eBay didn’t show the kind of growth you’d expect from a tech company,” Ritchie explained. “If we compare it to the Nasdaq 100 index, a $100 invested in the index in 2005 would’ve made $1,494.54 today with an annual return rate of 14.45%. Another issue with this type of investments is that they don’t pay dividends. Ebay started paying out dividends in 2019.
“If we take a look at Ebay in 2010 after what happened in the 2008 market crisis, the stock was trading at a P/E ratio that was close to 12,” explained Ritchie. “If you invested $100 back in the beginning of 2010, you’d have $727.72 today, that’s an annual return rate of 14.11%. So looking at the valuation of the company is key, regardless of the technology’s promises.”
So if you went back almost 30 years to put $100 in eBay stock, according to Ritchie’s calculations, you’d be getting an annual rate of 18.79% and a total return rate of 9201.78%, all adding up to $9,301.78 in present day dollars.
Not a bad investment at all.
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