SAN JOSE, Calif. - eBay Inc. (NASDAQ:EBAY), the global online marketplace with a market capitalization of $31.57 billion and impressive 63% stock return over the past year, has announced the signing of a definitive agreement to acquire Caramel, a provider of an end-to-end online automotive transaction platform. The acquisition, expected to close in the first quarter of 2025, aims to streamline the process of buying and selling vehicles on eBay, offering a secure and integrated experience that covers all aspects of a vehicle transaction. According to InvestingPro, eBay maintains strong financial health with industry-leading gross margins of 72%.
Caramel's technology simplifies the complexities involved in vehicle sales, such as paperwork, ownership transfer, financing, and transportation. This move is set to benefit eBay's Motors division, which is already a hub for auto parts and accessories enthusiasts. The integration of Caramel's platform is anticipated to make vehicle transactions on eBay safer and more convenient, irrespective of the buyer's or vehicle's location in the United States.
Chris Prill, General Manager of eBay Motors, highlighted the acquisition's role in fostering trust among vehicle buyers, stating that Caramel's platform consolidates the purchasing process into one streamlined operation. Edward Brojerdi, CEO and co-founder of Caramel, expressed enthusiasm for the partnership, citing eBay's commitment to reinventing ecommerce for enthusiasts.
Caramel, established in 2021 and headquartered in Los Angeles, CA, has been instrumental in digitizing the used vehicle purchase process. Its technology has supported major used vehicle marketplaces and auction sites in providing a fully digital ecommerce experience.
While the transaction's specific terms have not been disclosed, eBay's acquisition of Caramel is subject to customary closing conditions. This strategic move is part of eBay's broader vision to connect people and build communities, leveraging technology to enable economic opportunities for its users worldwide. With annual revenue of $10.27 billion and operating with moderate debt levels, eBay appears well-positioned for this expansion. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of eBay among 1,400+ top US stocks.
The information regarding this acquisition is based on a press release statement from eBay Inc.
In other recent news, eBay has announced a strategic partnership with Meta Platforms (NASDAQ:META), Inc., integrating eBay listings into Facebook Marketplace. This development, followed by a $3 billion expansion of eBay's stock repurchase program, signals the company's intent to enhance visibility and deliver value to shareholders. Citi analysts, maintaining their Buy rating and $75.00 price target for eBay, anticipate this partnership to be a net positive for eBay, leveraging Facebook's vast audience for increased visibility. Bernstein, another research firm, also maintains a positive outlook on eBay shares, citing consistent buybacks and anticipated Gross Merchandise Volume (GMV) growth. The partnership is set to begin trials in the U.S., Germany, and France, allowing users to browse eBay listings on Facebook Marketplace, with transactions being finalized on eBay. eBay's recent third-quarter results revealed a focus on consumer-to-consumer sales and artificial intelligence enhancements, contributing to a revenue increase of more than 3% to $2.58 billion. These recent developments highlight eBay's strategic moves to leverage partnerships and repurchase programs to drive growth and deliver shareholder value.
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