{"id":49605,"date":"2023-08-17T10:28:34","date_gmt":"2023-08-17T14:28:34","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/paypal-stock-cant-catch-a-break-a-big-investor-cut-its-stake\/"},"modified":"2023-08-17T10:28:36","modified_gmt":"2023-08-17T14:28:36","slug":"paypal-stock-cant-catch-a-break-a-big-investor-cut-its-stake","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=49605","title":{"rendered":"PayPal Stock Can&#8217;t Catch a Break. A Big Investor Cut Its Stake."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000721578\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<p>        <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>The applause for PayPal\u2019s new chief didn\u2019t last long.<\/p>\n<p>The payment giant\u2019s stock got a small bump on when it announced that<br \/>\n        Intuit<br \/>\n       executive Alex Chriss will take over as CEO next month. <\/p>\n<p>\n        PayPal<br \/>\n       Holdings (ticker: PYPL) dropped 6% Tuesday after activist hedge fund Elliott Investment Management seemed to disclose in a securities filing that it no longer owned shares. Elliott last summer had said it amassed a $2 billion stake in the payments giant. <\/p>\n<div class=\"paywall\">\n<p>The holding reports that hedge funds file with the Securities and Exchange Commission often give an incomplete picture of a fund\u2019s actual exposure. Elliott, for example, only ever reported owning one million shares of PayPal common stock, meaning it likely took most of its position through instruments it doesn\u2019t have to report. Though its most recent holdings report no longer included any shares of PayPal, it isn\u2019t clear whether it still retains exposure to the stock elsewhere.<\/p>\n<p>An Elliott spokesman said the firm declined to comment on the filing and described such reports as \u201cincomplete snapshots of what a firm like Elliott may own at any given time.\u201d<\/p>\n<p>Still, the report was poorly received by investors. Shares on Wednesday rose about 0.35% to $59.68 but were still down about 5.5% from Monday\u2019s close.<\/p>\n<p>PayPal CEO Dan Schulman on an earnings call after the stake was disclosed called his discussions with Elliott \u201cconstructive and collaborative\u201d and said its focus was on operational improvements, revenue-generating investments and return of capital.<\/p>\n<p>\u201cThey came in to pursue change, and they definitely were able to force them to cut costs,\u201d said Mizuho analyst Dan Dolev, who has a \u201cBuy\u201d rating on the stock. \u201cThe message is not great.\u201d<\/p>\n<p>Since the earnings call in August 2022, PayPal shares have faded. On Wednesday, the stock traded at about $59.68, down 33% from its closing price on Aug. 2 and 80% from its pandemic-era highs in 2021.<\/p>\n<p>Part of PayPal\u2019s problem is how fast consumers returned to prepandemic spending patterns that don\u2019t lean as heavily on online orders.<\/p>\n<p>But the cost savings projected by Schulman also haven\u2019t translated into the profit-margin improvements expected by investors. PayPal\u2019s operating margin in the second quarter fell more than a percentage point to 21.4%, thought it was still up from 19.1% in the second quarter last year. Part of that stems from how rapidly PayPal\u2019s \u201cunbranded\u201d checkout product for merchants has grown, which has lower margins than the branded business most consumers are familiar with.<\/p>\n<p>Longer term, PayPal faces stiff competition from tech giants that have lately grown their own checkout options.<br \/>\n        Apple Pay<br \/>\n       is nearly ubiquitous in iPhone apps. In addition to Apple (AAPL), Alphabet\u2019s Google (GOOGL) and<br \/>\n        Amazon<br \/>\n       (AMZN) have their own checkout functions.<\/p>\n<p>PayPal declined to comment.<\/p>\n<p>Analysts still like the stock. Thirty-one of 46 analysts rate shares a \u201cBuy\u201d or \u201cOverweight\u201d with an average price target of $85.88, according to FactSet. Indeed, the stock looks cheap relative to history, with a forward price\/earnings ratio of 11 versus its five-year average of 32.4.<\/p>\n<p>Though he\u2019s bullish on shares, Dolev doesn\u2019t see a catalyst in the near term that could cause its multiple to expand again.<\/p>\n<p>\u201cIt\u2019s going to be treading water, at least until the new CEO shows a real vision,\u201d Dolev said.<\/p>\n<p>Write to Joe Light at joe.light@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/paypal-stock-price-elliot-stake-a2506cd9?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The applause for PayPal\u2019s new chief didn\u2019t last long. The payment giant\u2019s stock got a small bump on when it announced that Intuit executive Alex Chriss will take over as CEO next month. PayPal Holdings (ticker: PYPL) dropped 6% Tuesday after activist hedge fund Elliott Investment Management seemed to disclose in a securities filing that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":49606,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-49605","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>PayPal Stock Can&#039;t Catch a Break. A Big Investor Cut Its Stake. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The applause for PayPal\u2019s new chief didn\u2019t last long. 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