PayPal jumps as Elliott Management says it has a $2 billion holding in the financial services company

PayPal jumps as Elliott Management says it has a $2 billion holding in the financial services company

PayPal shares rose as much as 13% in extended trading on Tuesday after the financial services firm issued stronger-than-expected second-quarter results. During its earnings presentation, PayPal said it had entered into an information-sharing agreement on value creation with Elliott Management.

“As one of PayPal’s largest investors, with an approximately $2 billion investment, Elliott strongly believes in the value proposition at PayPal,” Elliott managing partner Jesse Cohn was quoted as saying in the presentation.

Revenue grew 9% year over year, but the company reported a $341 million net loss, compared with a $1.18 billion profit during the year-earlier period. At the end of the quarter, PayPal had 429 million active accounts, up 6% year over year but below the 432.8 million consensus among analysts polled by StreetAccount.

The company stressed the progress it has made on capital efficiency. It expects to reduce costs by $900 million this year, and it said annualized benefits from the cuts and other changes should save at least $1.3 billion in 2023.

For the full year, PayPal said it expects $3.87 to $3.97 in adjusted earnings per share, up from the range of $3.81 to $3.93 that it provided in April. Analysts polled by Refinitiv had expected $3.82 per share.

During the second quarter, mainly thanks to Venmo growth, PayPal added about 400,000 net new active accounts, or NNAs. In the first quarter, PayPal reported 2.4 million NNAs, for a total of about 2.8 million in the first half of 2022. It said it still intends to add 10 million NNAs for the full year.



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