Economic fears could lead eBay stock to drop dramatically again

In March 2025, economic indicators across the United States raised concerns regarding a potential recession, which significantly impacted consumer confidence. Reports indicated that consumer optimism had fallen to its lowest point in approximately 2.5 years, leading to widespread market volatility. Among the companies affected was eBay, whose stock price had experienced considerable downturns during economic downturns in the past. For example, in 2022, eBay stock saw a substantial decrease of 45%, while during the 2008 financial crisis, it suffered a dramatic plunge of 75%. Historically, eBay stock performance has trailed the S&P 500 during downturns, revealing its fragility in turbulent market conditions. As inflation concerns remained prevalent, the overall economic backdrop continued to create unease among investors, prompting discussions about the company's future growth potential. eBay's revenues had been on a decline, averaging an annual reduction of 0.4% over the past three years, which contrasted sharply with a 6.3% growth rate in the S&P 500 during the same timeframe. Additionally, analysts noted that eBay's operating margin had dropped from 28.1% in 2021 to 22.5% in 2024, adding to the concerns surrounding its investment viability. While the company had made efforts to engage with new markets, such as listing products on Facebook, its future remained uncertain amid broader economic risks. Given these indicators, investors were left questioning whether to hold onto their eBay stocks in a potentially declining market or sell off their shares early to mitigate losses. The global economic landscape was further jeopardized by increasing geopolitical tensions exemplified by the conflict between Ukraine and Russia, alongside rising trade tensions and deteriorating relationships with traditional allies, which collectively added to an already shaky economic forecast.