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Utente Old Style
Shares in PayPal have slid more than 60% this year as people returned to their prepandemic spending habits. Its shrinking value, from a $350 billion company at its peak to one valued at about $89 billion, has prompted an activist to come knocking at the door of the payments company.
- Activist investor Elliott Management has built a stake in PayPal, according to The Wall Street Journal, citing people familiar with the matter. But there were no details on the size of Elliott’s stake nor its game plan. PayPal and Elliott didn’t immediately respond to a request from Barron’s to comment outside normal business hours.
- PayPal had been a pandemic darling as households increasingly shopped online. But that level of activity hasn’t been sustained and earlier this year the company cut its 2022 earnings forecast, which led to its worst one-day selloff in its history as a publicly traded company.
- PayPal shares currently trade around 19 times forward earnings, according to data from FactSet. Peers such as Visa and Mastercard trade at 26 times earnings and 29 times, respectively. Narrowing that valuation gap—particularly for a more growth-oriented company such as PayPal—is something Elliott would likely push for.
