|From: Glenn Petersen||8/30/2021 12:42:07 PM|
|PayPal is exploring a stock-trading platform for its U.S. customers|
PUBLISHED MON, AUG 30 202111:44 AM EDT
UPDATED 49 MIN AGO
Kate Rooney @KR00NEY
-- PayPal is exploring ways to let users trade individual stocks, according to two sources familiar with the plan, and public details around a new executive hire.
-- As part of that expansion, the payment giant hired a brokerage industry veteran to lead “Invest at PayPal” -- a previously unreported division of the payments giant.
-- The move comes amid a retail trading boom that brought millions of new investors into the stock market, and more regulatory scrutiny for some brokerage firms.
PayPal is exploring a possible stock-trading platform.
After rolling out the ability to trade cryptocurrencies last year, the payments giant has been exploring ways to let users trade individual stocks, according to two sources familiar with the plans, and public details around a new executive hire.
The San Jose, California-based company recently hired brokerage industry veteran Rich Hagen as part of that move. After leaving Ally Invest, Hagen is now the CEO of a previously unreported division of PayPal called “Invest at PayPal,” according to his LinkedIn page. Hagen was the co-founder of online brokerage TradeKing, which was bought by Ally Invest.
His current job description outlines PayPal’s efforts to “explore opportunities” in the consumer investment business. When reached for comment, PayPal pointed CNBC to CEO Dan Schulman’s comments at the company’s investor day in February where he spoke about the long-term vision for the company and how it may include many more financial services, including “investment capabilities.”
PayPal’s move comes amid a retail trading renaissance. More than 10 million new individual investors have entered the market in the first half of this year, roughly matching last year’s record level, according to estimates from JMP Securities. A combination of stay at home orders during the pandemic, government stimulus checks and viral events like the rise of GameStop in January have spurred on new interest in the stock market.
Trading has become a booming business for the companies that offer it. PayPal rival Square offers stock and cryptocurrency trading through the Square Cash App, and its CFO has said it drives engagement and revenue per user. Robinhood, which went public earlier this summer, has seen explosive growth with more than 22.5 million customers and doubled revenue from a year ago in the most recent quarter.
In order to offer stock trading to customers, it’s possible PayPal partners with or buys an existing broker-dealer as part of this plan. According to one source, PayPal has held already discussions with potential industry partners.
Still, one source familiar said it was unlikely that the trading service would roll out this year.
Shares of PayPal jumped more than 3% following the CNBC report, while Robinhood shares lost more than 3%.
If PayPal did look to get full approval as a brokerage firm alone, it would need to complete a new membership process through the industry’s main regulator, FINRA. That process could take more than eight months. PayPal has more than 400 million accounts worldwide.
A PayPal stock-trading launch would come at competitive time for the fintech industry. Square, PayPal, Robinhood, SoFi offer a list of overlapping products and describe the same mission of being a one-stop-shop for finance. Cryptocurrency and stock trading are seen as ways to keep consumers engaged on these payment platforms.
While helpful for user growth and revenue, the retail trading boom has also invited more regulatory scrutiny.
The Securities and Exchange Commission said last week that it was stepping up its inquiry into “gamification” and how they use technology to interact with their customers. The agency mentioned behavioral prompts used by online brokerages and investment advisors that may encourage investors to trade more stocks and other securities and take on more risks.
PayPal is looking to launch a stock-trading platform for its customers (cnbc.com)
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|To: BigMacAttack who wrote (148)||10/20/2021 12:39:11 PM|
|From: Glenn Petersen|
|Pinterest shares soar following report PayPal may buy it|
PUBLISHED WED, OCT 20 202111:29 AM EDT
UPDATED 10 MIN AGO
Jessica Bursztynsky @JBURSZ
-- Shares of Pinterest soared Wednesday morning on a report PayPal may acquire the social media company.
-- The company’s stock was halted twice.
-- PayPal has discussed acquiring the company for a potential price of around $70 a share, which would value Pinterest at about $39 billion, according to Bloomberg.
Shares of Pinterest soared Wednesday morning on a Bloomberg report that PayPal may acquire the social media company.
The company’s stock was halted twice, before gaining about 9% as of midday. PayPal, meanwhile, dipped more than 3% on the news.
PayPal and Pinterest declined to comment.
PayPal has discussed acquiring the company for a potential price of around $70 a share, which would value Pinterest at about $39 billion, according to Bloomberg. Pinterest stock closed at $55.58 per share on Tuesday.
Pinterest went public in April 2019, where it was valued at just more than $10 billion.
PayPal has largely benefited from the boom in online shopping since the start of the coronavirus pandemic. Last year, it pitted itself against the growing buy-now-pay-later companies with its “ Pay in 4” offering. A potential acquisition of Pinterest could push the company into social commerce, a growing space that other tech giants are already working on.
Facebook, for example, has heavily pushed into making Instagram shoppable. Last summer, it began testing a dedicated “Shop” tab on its home screen. It also lets users shop through regular Instagram posts, Live, Stories and its Explore feed, and has tested shopping on its short-form video feature Reels.
Social commerce lets companies track clicks and purchases within their respective apps, so they can prove the effectiveness of ads to advertisers. It also could allow the companies to receive a cut of each transaction.
Pinterest shares soar following report PayPal may buy it (cnbc.com)
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|From: Glenn Petersen||2/2/2022 7:03:25 AM|
|PayPal stock plunges on weak earnings guidance|
PUBLISHED TUE, FEB 1 20224:28 PM EST
UPDATED TUE, FEB 1 20229:21 PM EST
Lauren Feiner @LAUREN_FEINER
Kate Rooney @KR00NEY
-- PayPal reported mixed Q4 2021 earnings Tuesday and provided guidance for the next quarter that fell short of analyst estimates.
-- The company expects Q1 non-GAAP earnings per share of 87 cents, short of the $1.16 analysts anticipated.
-- It also reported weak full year revenue growth guidance for 2022.
PayPal shares fell more than 17% after hours on Tuesday after reporting mixed results and Q1 guidance that fell below analyst estimates.
Here are the key numbers:
Earnings per share: $1.11 per share, ex-items vs. $1.12 per share expected, according to a Refinitiv survey of analysts
Revenue: $6.92 billion vs. $6.87 billion expected, according to Refinitiv
The company expects first-quarter non-GAAP earnings per share of 87 cents, short of the $1.16 analysts anticipated.
PayPal forecast revenue to grow about 15% to 17% for the full year 2022, on a spot and foreign-currency-neutral basis. Analysts had expected year-over-year revenue growth for 2022 to be 17.9%.
PayPal CEO Dan Schulman told CNBC that the company took “a measured approach” to guidance but revenue should accelerate in the second half of the year.
“We’ve got the eBay transition to work our way through. This transition is hiding some of the underlying strength of the business,” Schulman said, adding that eBay put $1.4 billion of revenue pressure on the company last year, and should be closer to $600 million this year. By the third quarter, PayPal won’t have to adjust results for eBay.
The dot-com-era tech giant acquired PayPal twenty years ago to handle payments for its website. In 2015, the two companies split and eBay has been slowly transitioning to its own payment system, and off from PayPal.
Schulman also blamed “exogenous factors” like inflation weighing on consumer spending among parts of PayPal’s userbase, and supply chain issues “disproportionately impacting” cross-border payments, especially out of China.
Slower user growth, too
PayPal’s user numbers, measured by net new active accounts, also missed the company’s prior targets.
The lower total was in part due to 4.5 million “illegitimate” accounts that joined the platform during incentive-based campaigns. Finance and tech companies often offer perks, such as cash bonuses, to drive users to their apps. But CFO John Rainey said in this case, millions of new accounts were excluded from quarterly user growth.
While the number was immaterial to PayPal’s customer base of 426 million “it affected our ability to achieve our guidance in the quarter,” Rainey said.
“We regularly assess our active account base to ensure the accounts are legitimate,” he said on the fourth-quarter earnings call. “This is particularly important during incentive campaigns, that can be targets for bad actors attempting to reap the benefit from these offers without ever having an intent to be a legitimate customer of our platform.”
PayPal said it expects to add 15 million to 20 million new accounts this year and walked back its goal of 750 million total accounts set by the company last year.
“Moving forward, we will continue to grow our users, but our focus will be on sustainable growth and driving engagement,” Rainey said. “To be very clear, this is a choice on our part. We could increase our spin and accelerate our net new active trajectory. However, we believe there are better ways to achieve our financial results.”
PayPal (PYPL) Q4 2021 earnings (cnbc.com)
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|To: Glenn Petersen who wrote (155)||2/2/2022 12:34:27 PM|
|From: Sr K|
PayPal Shares Tumble After Disappointing Outlook
Payments giant cited effect of inflation on personal spending in tempering its growth outlook for the year
PayPal has disappointed investors for the second quarter in a row.PHOTO: GABBY JONES/BLOOMBERG NEWS
Peter Rudegeair Follow
Caitlin Ostroff Follow
Updated Feb. 2, 2022 10:10 am ET
PayPal Holdings Inc. PYPL -26.04% shares headed toward their worst one-day performance on record after the company lowered its profit outlook for 2022 and walked back an ambitious growth strategy it put in place last year.
PayPal shares sank 24% Wednesday morning, erasing tens of billions of dollars in market value. For much of 2020 and 2021, PayPal was an investor favorite as the migration to online shopping over the course of the pandemic boosted its transaction volumes and profits, sending its market capitalization higher than all U.S. banks except JPMorgan Chase & Co.
Investor sentiment started to sour last fall as lockdown measures eased. After Wednesday’s drop, PayPal’s stock is back to its level from May 2020.
Executives said a number of forces will pressure its business in 2022. Those include the runoff in government stimulus packages, labor shortages, the Omicron variant, inflation and supply-chain issues. It is also losing business from one of its biggest customer sources— eBay Inc. —faster than expected because the online marketplace is building out its own payments arm.
In a surprise to analysts and investors, PayPal also abandoned a target it established last year of roughly doubling its active user base to 750 million accounts. Chief Executive Dan Schulman said the focus now was on getting frequent PayPal users to use its services more often and not on pursuing customers that are unlikely to transact with PayPal regularly.
“You can officially add PayPal to your list of pandemic highfliers that are experiencing a quite bumpy landing,” wrote MoffettNathanson analyst Lisa Ellis in a research note.
For 2022, PayPal expects to generate adjusted earnings per share of roughly $4.67, well below the $5.21 consensus estimate of analysts polled by FactSet. PayPal also forecast revenue growth of 15% to 17%, less than the 18% growth figure the company released a few months ago, which investors then viewed as a disappointment.
“Our medium-term targets simply did not contemplate inflation at a 40-year high and supply chain issues not seen in my lifetime,” Chief Financial Officer John Rainey said on the earnings conference call. “As such, 2022 is now off to a slower start than we previously anticipated and we are taking a more conservative stance on the year.”
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