- PayPal‘s stock fell on news that eBay has signed up with a new primary payment processor.
- EBay accounts for 13% of PayPals processed payments.
- PayPal will remain on eBay’s platform until at least July 2023.
- Watch PayPal’s stock in real time here.
Shares of PayPal plunged after news broke that eBay, PayPal’s former parent company, signed up with a new primary payment processor.
It’s stock was at $US85.48 per share before it announced earnings on Wednesday. After PayPal reported the news in its earnings release, its shares fell as much as 12% in after-market trading. This morning, it was down 9.69% at $US77.05 per share.
The multinational ecommerce company said that it had partnered with Dutch payments company Adyen for its global payments processing, which would allow users to remain on eBay’s website instead of being diverted to a separate PayPal screen.
PayPal will still remain a payment option on eBay’s website until at least July 2023. EBay accounts for roughly 13% of PayPal’s processed payments.
The news was revealed after PayPal released its quarterly earnings that beat expectations on Wall Street, but gave bleak forward guidance for the next quarter.
Glenn Greene, an Oppenheimer analyst, said after the earnings that he was keeping his Outperform rating and price target at $US80 per share, which is 5% above its current price. He said that PayPal still has a unique competitive position within the online payments ecosystem.
“The company’s two sided digital payments platform is a valuable and difficult-to-replicate asset exhibiting strong network effects,” Greene said. “We think PYPL is particularly well positioned to benefit as retail activity continues to migrate from brick-and-mortar stores toward online and mobile venues.”
PayPal’s stock is up 7.68% for the year.
Read more about how PayPal’s competitor, Venmo, is trying to edge out Apple’s bid to dominate the payment processing world.
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