Pacific Crest Calls Alibaba/eBay Rumor 'Unlikely'

Speculation that eBay Inc EBAY could be acquired by Alibaba Group Holding Ltd BABA is far fetched, an analyst said on Tuesday, February 10.

Rumor Isn't New

Market chatter surfaced earlier in the day with similar speculation occasionally voiced at least since September 2014. But Pacific Crest analyst Cheng Cheng consigned the thought to the realm of very unlikely in an interview on Tuesday.

Pacific Crest Speaks

"It's hard to see buyers and sellers on eBay participating in a market in China," Cheng said.

Geographical differences –- including the Pacific Ocean –- "seem to limit the synergies you can get by cross-selling on these two platforms," according to Cheng.

Other factors mitigating against the notion include "a hefty price tag" and Alibaba's current focus on expanding non-U.S. markets, Cheng said. EBay's post PayPal spin-off has been estimated at between $30 billion to $40 billion, compared with Alibaba's current market capitalization of more than $215 billion.

Apart from Tuesday's rumor, similar ideas appeared in late December, when the news site re/code published a speculative list of potential mergers in 2015 that included Alibaba and eBay.

Related Link: Alibaba/eBay Deal Talk Is Not Imminent, Wedbush Analyst Says

Does Alibaba Even Have Interest In Western Markets?

Alibaba has indeed suggested its interest in Western markets and recently announced a partnership with LendingClub Corp LC, in which the U.S. company will offer loans to small businesses buying from Chinese suppliers.

LendingClub has recently announced similar partnerships with Google Inc GOOGL GOOG and a consortium of small U.S. banks.

EBay changed hands recently at $55.31, up nearly 2 percent.

Brianna Valleskey and John Seward contributed to this report.