IN 2002, eBay had acquired Paypal for $1.5 billion to have its own payment processing platform. In many ways, Paypal’s growth has slowed. Now the marriage is breaking. Ebay will let go Paypal next month.
Free from outside control, PayPal will start trading in the stock market under the symbol “PYPL” starting from July 20 and Paypal shares will be shared within eBay stockholders just before then. Dan Schulman will retain his leadership role at PayPal but under a new title of CEO.“eBay and PayPal are two great, special businesses,” John Donahoe, chief executive and president of parent company, eBay Inc., said.“As separate, independent companies, eBay, led by Devin Wenig, and PayPal, led by Dan Schulman, will each have a sharper focus and greater flexibility to pursue future success in their respective global commerce and payments markets.” (Source: PayPal set to break up with eBay next month)
Interestingly, analysts are hailing this split for eBay as well. Its price target has been increased.
With PayPal set to split from eBay Inc. EBAY, -2.47% and begin trading around July 6, J.P. Morgan Chase analysts have “modestly” increased their target price for eBay to $64 from $60. J.P. Morgan analyst Doug Anmuth wrote in a note on Monday that the slight raise is to account for both PayPal’s and eBay’s valuation might look like following the split. (Source: Marketwatch)
The new payment processing world will be very interesting. We have already seen that Stripe is the new “kid-on-the-block” and growing amazingly!