PayPal shares jump on Elliot’s $2 bln stake, annual profit guidance raise

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

Register now for FREE unlimited access to

Aug 2 (Reuters) – Shares of PayPal Holdings (PYPL.O) surged in extended trading on Tuesday after it said Elliott Investment Management has an over $2 billion investment in the company and also raised its annual profit guidance.

PayPal’s shares shot up nearly 12% after market close, on the back of Elliot becoming one of its largest shareholders and the company raising its adjusted profit expectations to between $3.87 and $3.97 per share for the year, up from its previous forecast of $3.81 and $3.93 .

The fintech company has “an unmatched and industry-leading footprint across its payments businesses,” 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

PayPal, which was among companies that won big during the pandemic, saw shares wipe out over 70% of their market value in a year as e-commerce growth retreated from pandemic-era records.

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

Decades-high inflation and aggressive interest rate hikes have weighed down consumer confidence, which tumbled to a recent low, as people tighten spending in order to save more.

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

The company also announced a slew of moves including appointing Blake Jorgensen as Paypal’s new chief financial officer and a new $15 billion repurchase program. Blake, who takes over the role on Wednesday, joins 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

Your email address will not be published.

%d bloggers like this: