eBay Incurs Loss from its Snapdeal Investment
eBay Incurs a Loss of $61 million from its Snapdeal Investment
eBay Incurs Loss from its Snapdeal Investment, Global e-commerce giant eBay has incurred a loss of $61 million after investing about $133 million in 2014 in the trouble-torn Jasper Infotech Private Limited, which runs Gurugram-based Snapdeal.
eBay recorded a $61 million impairment loss from in its annual report filed with the US Securities and Exchange Commission (SEC). Further, the regulatory filings also revealed that eBay Inc has recorded gains $167 million by selling eBay India business to Flipkart.
The company had invested in 2014 and had made a partial exit in 2016 by selling the portion of its equity interest in Snapdeal. “The investment was studied fairly due to events and some state of affairs that we recognize as having a remarkable impact on its fair value,” eBay said.
While eBay Inc is one of the early and the second large foreign investor that got into trouble after Japan-based Softbank suffered a loss from its investments in Jasper Infotech. Previously, SoftBank Group had incurred a loss of over $1.41 billion from its investments in the country’s Internet commerce sector.
Over the past two years, Snapdeal’s destiny has taken a turn for the worse after its valuation had fallen to less than $ 1 billion from $6.5 billion as competition in India’s e-commerce segment gets raised after rival giant e-commerce firm Amazon started expanding rapidly.
Despite burning its finger, eBay made a significant investment of over $500 million in India’s e-commerce poster boy, Flipkart along with the selling its India business unit to Flipkart.
Currently, eBay Inc is enjoying a 5.44% ownership interest with Flipkart as well as both the giant e-commerce firm are also partnering to grasp numerous opportunities in cross-border trade. The partnership will also benefit Flipkart sellers to expand its sales globally. The annual report also evaluated the eBay’s total investment in Flipkart of $725 million.
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