Nasdaq: Paypal shares slump 13% after poor year-end outlook
After the CEO warned about the ‘muted’ outlook, Paypal shares ended down 13% all-session on the IG platform. There has been a massive 78% value loss for investors in the company as opportunities are seen as scarce.
(Video Transcript)
Paypal down sharply
It was a big loss for the payments company PayPal in extended trade late last night on the IG platform, down 13% after the company cut its annual revenue growth forecast.
Let's take a look at the figures. It posted an adjusted profit of $1.08 per share for the third quarter (Q3). Now, that was higher than the $0.96 expected and revenue coming in pretty much in line with the estimates.
The PayPal boss, Daniel Schulman, said in a statement that he expected e-commerce to be pretty muted in the fourth quarter and in anticipation of a broader economic downturn, the group cut its adjusted growth outlook to 10% from 11% previously for the year, and this made itself felt on the share price.
Paypal share price
Let's take a look at what's been happening.
This is the long-term picture for PayPal shares. You can see from the Covid lows it appreciated some 279% as people spent more online using PayPal as a way to do that.
And then subsequent to that, there's been all sorts of problems for PayPal. And in fact, recently and indeed yesterday, we ended down at a point where we were 78% adrift from those record highs for PayPal.
You can see it extended trading today's session. We are up just a touch off of the lows. So some people see an opportunity to buy back into the stock.
But in fact, if you look at where we'll open on the cash trade when Wall Street gets under way today, it will be down and down by a significant margin because of the concerns about the outlook for the fourth quarter.
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