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PayPal's strong stock debut

July 20, 2015

On its first day as a separate and publicly traded company following its spin off from eBay, digital payment service PayPal's stock posted strong gains and began trading at a higher value than that of its former parent.

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PayPal Logo
Image: Getty Images/S. Gallup

PayPal shares rose by about 5 percent in early trading Monday, bringing the company's value to about $50 billion (46 billion euros). Meanwhile, eBay rose 0.86 percent to $28.35, equating to a market value of around $34 billion.

PayPal officially separated from eBay Inc. on Friday, 10 months after they announced their split.

PayPal processed around $235 billion in total payment volume last year and logged revenue amounting to some $8 billion. The company plans to grow market share in mobile and online payments as well as expand in areas like in-store payments.

Solid growth

PayPal was founded in the late 1990s and bought by eBay in 2002 for $1.5 billion.

The California-based online payment firm had some 169 million active users and processed 1.1 billion transactions in the second quarter, with transaction volume rising 27 percent from a year earlier, according to the company.

In January this year, activist investor Carl Icahn, who according to the Reuters news agency owns a 2.48 percent stake in eBay, for the first time called for the separation and PayPal stock market listing.

The call came as PayPal's revenues were growing 19 percent last year, twice as quickly as eBay's, thus promising huge profits from going public.

PayPal is trading on the Nasdaq Stock Market under the stock ticker "PYPL," its original symbol before being acquired by eBay.

sri/cjc (Reuters, dpa, AP, AFP)