eBay shares tumbled 5.03% during intraday trading on Monday, extending pre-market losses after Wells Fargo downgraded the stock from Equal Weight to Underweight and slashed its price target from $105 to $92. The downgrade triggered a sharp sell-off as investors reacted to the bank's more cautious outlook on the e-commerce platform.

Wells Fargo cited increased dilution following eBay's completed acquisition of fashion resale platform Depop, which closed on July 30 after receiving regulatory clearance from the UK Competition and Markets Authority in mid-July. The bank also pointed to the need for significantly higher marketing spend on Depop to fend off competition from Vinted, which is entering the U.S. market. Wells Fargo cut its earnings estimates by approximately 10%, placing its forecast roughly 9% below the Street consensus.

The downgrade comes at a critical juncture for eBay, which is scheduled to report second-quarter earnings on August 5 after market close, with consensus EPS expectations at $1.20, down from $1.37 in the prior quarter. The move also unfolds against a backdrop that includes GameStop's ongoing pursuit of a roughly $56 billion acquisition of eBay — which eBay has rejected — and a recent $56 million harassment lawsuit settlement.