eBay Down 1.5% as US Gov Sues for Violation of Federal Laws
Shares of eBay slid 1.5% lower on Wednesday’s market open after reports broke out that the US sued the e-commerce giant for allegedly violating the Clean Air Act (CAA) and federal environmental laws by selling toxic aftermarket products for motor vehicles.
eBay Charged for Violating US Federal Environmental Laws
According to Reuters, the US government unveiled a lawsuit against e-commerce behemoth eBay on Wednesday, accusing the company of “violating federal environmental laws related to its sale of aftermarket products for motor vehicles or motor vehicle engines.”
eBay’s shares tumbled over 1.5% at the market open.
The complaint alleges that eBay sold, offered for sale or caused the sale of more than 343,000 aftermarket defeat devices, which defeat motor vehicle emission controls, a violation of the CAA. Aftermarket defeat devices significantly increase pollution emissions – including carbon monoxide, nitrogen oxides, particulate matter and nonmethane hydrocarbons – that harm public health and impede efforts by the EPA, states, Tribes and local agencies to plan for and attain air quality standards.
The complaint also alleges that eBay has violated FIFRA by unlawfully distributing or selling at least 23,000 unregistered, misbranded or restricted-use pesticide products, even in violation of a stop sale order EPA issued to eBay in 2020 and amended in 2021. Examples include a high toxicity insecticide banned in the United States, restricted use pesticides that only certified applicators may apply and products fraudulently claiming to protect users against the SARS-CoV-2 virus.Justice Department Files Complaint Alleging Environmental Violations by eBay: www.justice.gov
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eBay Stock Heading for 2-Month Low
eBay’s latest downturn took the company’s share price to $43.11 at publication – the lowest level since early August. The company’s stock experienced a rollercoaster ride in 2023, climbing just over 2% year-to-date, compared to the S&P 500’s gains of 13% during the same period.
The company’s share price plummeted sharply earlier this year after its Q3 profit outlook missed Wall Street estimates. The weak guidance came as eBay faced high costs to support categories such as auto parts, refurbished goods, and collectibles.
The company said it expects Q3 profit to range between $0.96 and $1.01 per share, compared to Wall Street’s consensus estimates of $1.02. eBay’s gross merchandise value (GMV), a key metric that gauges the value of goods and services sold on the marketplace, declined 2% to $18.2 billion in Q2.
At its current stock price, eBay trades just above the support zone at $42.78 – $42.50, indicating an area where the buying pressure may increase should shares continue to slide. Falling below this threshold would send eBay’s share price toward the next support level at around $42.01.
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