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After a 13-year absence, online-payments provider PayPal Holdings Inc. debuted Monday morning on the Nasdaq Stock Market as an independent company following its spin-off Friday from parent eBay Inc. Investors looking for growth opportunities in payments liked what they saw, pushing PayPal’s price up approximately 6% and valuing the company well above eBay, the big but slow-growing online auction and e-commerce portal.
“There has been a tremendous amount of anticipation for PayPal to become an independent company, and it is peaking today on the actual spin off,” stock analyst Gil Luria, managing director at Los Angeles-based Wedbush Securities, tells Digital Transactions News by email. “Investors are hungry for good, large growth companies, and PayPal is very big and growing nicely.”
PayPal president and chief executive Dan Schulman, other staff members and customers rang the New York City-based Nasdaq’s opening bell and passed out coffee and doughnuts to passers-by in Times Square. PayPal also took pictures of visitors and projected the images on the Nasdaq’s seven-story digital billboard.
San Jose, Calif.-based PayPal trades under the ticker symbol PYPL, the same symbol PayPal used before eBay bought the company in 2002 for $1.5 billion.
“As the world’s open, digital-payments platform and most trusted and popular digital wallet, we are excited to celebrate our listing day and embark on our next chapter,” Schulman said in a news release. “As an independent company, we see a tremendous opportunity for PayPal to expand our role as a champion for consumers and partner to merchants, and to help shape the industry as money becomes digital at an increasingly rapid pace.”
PayPal processed $235 billion in total payment volume in 2014, including $46 billion in mobile payments, and generated more than $8 billion in revenues. The company says it has more than 169 million active customer accounts in 203 markets around the world.
In late Monday morning trading, PayPal’s shares were priced at $40.83, up 6% from their $38.39 close on Friday, PayPal’s last day of trading on a so-called when-issued basis ahead of the eBay spin-off. EBay shareholders received one share of PayPal for each eBay share they owned. Based on 1.2 billion eBay shares outstanding and now an equal number of PayPal shares, PayPal’s market capitalization is approximately $49 billion versus $34.2 billion for eBay, whose shares were trading at $28.54 this morning.
The two companies have a five-year operating agreement that will continue the easy access eBay users have to PayPal’s services.
