Paypal earns significantly less, but a new major investor gives investors hope: the payment service promises austerity measures, increased profit targets for the year as a whole and introduces a new chief financial officer.
The entry of hedge fund Elliott and an increase in earnings guidance for the full year have helped PayPal stock soar. The online payment processor announced after the US market close that Elliott Investment Management has now become one of the largest shareholders with an investment of more than two billion dollars. Paypal has "an unmatched and industry-leading presence," said an Elliott representative.
The PayPal shares initially rose almost twelve percent in after-hours trading. An entry by the activist investor had recently boosted the Pinterest title. For the full year, PayPal is now expecting earnings per share of between $3.87 and $3.97. The former subsidiary of the Internet auction house Ebay had previously given the range as 3.81 to 3.93 dollars.
In the past quarter, earnings per share fell to $0.93 from $1.15 in the same period last year. However, this was above the experts' expectations of $0.86. In addition, a new share buyback program with a volume of 15 billion dollars has now been announced. Blake Jorgensen of Electronic Arts is also to become the new chief financial officer, it was said.
