NEW YORK: Shares in PayPal jumped in first trades after spin-off from eBay. PayPal was up 5.42 per cent at US$40.47, equating to a market capitalization of more than US$49 billion at the closing bell on the Nasdaq exchange. In after-market trades, the share price rose another per cent. Meanwhile, eBay rose 2.4 per cent to US$28.57, giving the auction giant a value of some US$34 billion but the share price slipped slightly to US$28.38 after the market closed. The online payments group has a higher market value than its former parent.
“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 chief executive Dan Schulman said in a release. BMO analyst Paul Condra, in a note to clients, called PayPal the “only truly disruptive consumer payment network with scale and strong brand recognition.” He said it was “uniquely positioned not only as a beneficiary of growth in electronic payments but also as a quasi-disruptor of the incumbent card-based systems (MasterCard/Visa).”
The spin-off, came after months of pressure from activist investor Carl Icahn. He had criticized eBay for poor management and claimed that keeping eBay with PayPal depressed the value of both units…..
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