PayPal Holdings Inc., one of the world's largest internet payment companies established in 1998, has increased its shares value amid the growing digitization of money. The increase was noted during its first day as a separate and publicly traded company following the outlined plans to profit from the growth of mobile payments.
In 2002, PayPal became a fully owned subsidiary of eBay and in 2014, the payments system company moved $228 billion in 26 currencies across more than 190 countries. It generated a total revenue of $7.9 billion or 44 percent of eBay's total profits. On that same year, eBay announced plans to spin-off PayPal into an independent company by 2015. And On Jul. 18, Friday, the spin-off was completed and PayPal officially separated from eBay Inc., Financial Express reported.
On Monday, PayPal shares jumped $2.08 or 5.4 percent to $40.47 on the Nasdaq Stock Exchange trading under the stock ticker "PYPL." And to commemorate the listing, PayPal CEO Dan Schulman and his employees rang in the opening bell in the Nasdaq. While the company gave out food through food trucks in Times Square and posted passerby's pictures on Nasdaq's seven-story digital billboard.
"One of the big advantages for us is truly we now are world's leading neutral third-party payments provider and that will allow us the opportunity to partner with a number of companies across the world who before the separation either directly competed with eBay or had a perceived potential conflict with eBay," Schulman said during an interview. "And now we are free to work with any of them."
Schulman also stressed that the company's concentration is to develop its relationship with merchants and consumers. And the company plans to escalate market share with online and mobile payments, along with in-store payments.
Due to the increasing share values, what do investors still see in PayPal? According to Wired, PayPal is an incumbent and apparently a heavy target for Silicon Valley's aspiring disruptors. And since the company vastly expanded its already sizable footprint, these figures including the years of experience, resources and in-house talent to adapt to a changing future made PayPal more valuable to investors.
"Investors have been waiting to invest in PayPal for a long time, even before the split was announced," Los Angeles' Wedbush Securities analyst Gil Luria said. "We're finally at a point where you can only own PayPal with its market-leading position and growth rate."
Meanwhile, PayPal's value is in its growth rate as online shopping expands and the spending habits of consumers change, Bloomberg Business noted.
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