PayPal Shares Jump on Elliot’s $2 Billion Stake, Annual Earnings Expectation Boost

The PayPal app logo on a mobile phone in this illustration photo from Oct. 16, 2017. REUTERS/Thomas White/Illustration

Register now for FREE unlimited access to

Aug 2 (Reuters) – Shares of PayPal Holdings (PYPL.O) rose in expanded trading Tuesday after it said Elliott Investment Management had an investment of more than $2 billion in the company and also raised its annual profit expectations.

Shares of PayPal shot up nearly 12% after market close, thanks to Elliot becoming one of the largest shareholders and the company raising its adjusted earnings estimates to between $3.87 and $3.97 per share for the year. an increase from the earlier forecast of $3.81 and $3.93 .

The fintech firm has “an unparalleled and industry-leading footprint in its payments business,” said Jesse Cohn, a managing partner at Elliot, a day after the investment firm disclosed a similar stake in Pinterest Inc (PINS.N). read more

Register now for FREE unlimited access to

One of the major gainers during the pandemic, PayPal saw stocks wipe out more than 70% of their market value in a year as e-commerce growth pulled back from its pandemic-era records.

“Investors may view additional business challenges as supportive of the activist’s ability to drive change at PayPal, which could help create a floor under the stock,” said Jason Benowitz, senior portfolio manager at Roose Investments.

Decades of high inflation and aggressive rate hikes have weighed on consumer confidence, which has fallen to a recent low as people cut spending to save more.

The company reported lower adjusted earnings of 93 cents per share for the three months ended June 30, compared to $1.15 per share a year earlier, but surpassed estimates of 86 cents.

The company also announced a slew of measures, including the appointment of Blake Jorgensen as Paypal’s new Chief Financial Officer and a new $15 billion buyback program. Blake, who will take over the role on Wednesday, will switch to PayPal from Electronic Arts (EA.O).

Register now for FREE unlimited access to

Reporting by Mehnaz Yasmin in Bengaluru; Editing by Krishna Chandra Eluri

Our Standards: The Thomson Reuters Trust Principles.

Leave a Comment