The Rising Shares Of Paypal- $2 Billion Stake

On August 2nd, 2022, it was announced by PayPal Holdings that Elliott Management now has over $2 billion staked in the company, leading to the rise in annual profit guidance.

With the company already being a huge success, known for its ability to make paying for things online and receiving money, safe and secure, it seems that its achievements may be reaching new heights. So what will this mean for the company?

What Were The Effects?

With the announcement of the $2 billion stake that Elliot now has over the company, PayPal’s shares have already begun to increase drastically by nearly 12%.

A manager partner of Elliot named Jess Cohn described the well-known company as “an unmatched and industry-leading footprint across its payments businesses; acknowledging its success as an online financial service“.

The Effect Of The Pandemic

It was in fact the pandemic that made PayPal more relevant than ever.

With digital payment becoming the new normal, it became increasingly important for everything to be moved online, leading people to adapt to carry out all financial transactions through the screen of their phones.

PayPal was one of the many companies that thrived during the pandemic due to its already online platform and even saw its shares take out over 70% of their market value within the space of a year.

Looking To The Future For PayPal

With PayPal now looking to do all they can to keep up the growing success of their business and therefore cut back costs, it is estimated that by reducing the headcount of their staff their annual revenue will grow at 11% on an FXN-basis.

Regarding the expectation for PayPal’s next move, Benowitz stated: ‘We expect the company to materially refresh its top management layer and make the tough choice to improve profit margins.’

This was followed by a second announcement confirming the company’s plans for the future, with Blake Jorgensen being named the new chief financial officer, embarking upon a $15 million repurchase program.

With the profit expectation for the company having been adjusted from $3.81 and $3.93 to $3.87 and $3.97 per share per year, we can expect big things from PayPal in the year to come.