PayPal’s (NASDAQ: PYPL) stock has taken a tumultuous journey over the past few weeks, experiencing a steep decline since the beginning of the month.
Despite a brief glimmer of hope following the appointment of Alex Chriss, former Intuit executive, as the new CEO, market enthusiasm quickly waned.
Notably, the company’s shares plunged once more on August 17, reaching their lowest point in six years, raising concerns about the future direction of this payments industry giant.
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PYPL closed 1.8% lower on Thursday at $58.60, a level not seen since August 11, 2017, according to Barchart data.
The stock is down 6.4% over the past week and more than 20% on the month, losing almost $20 billion in market cap over this period.
PayPal’s latest decline comes in what was a poor trading session for the broader stock market, with the S&P 500 Index (SPX) dropping 0.77 to 4,370.36 and the Dow Jones Industrial Average (DJIA) sliding 0.84% to 34,474.83.
Why is PayPal stock down?
PayPal’s stock market woes can be attributed to several factors.
Firstly, its sharpest drop this week came on Tuesday after activist hedge fund Elliott Investment Management revealed in a filing with the SEC that it dissolved its stake in the fintech company.
The move came as a significant surprise to PayPal investors, given that Elliott revealed a $2 billion stake in PYPL just 1 year ago.
However, an Elliott spokesman said the investment firm would not comment on the new filing. Moreover, it said that such reports offer “incomplete snapshots of what a firm like Elliott may own at any given time.”
Shares of PayPal have been on a steep downward trajectory since August 2022, when the company reported a $341 million net loss, compared with a $1.18 billion profit in the year-earlier quarter.
More precisely, it was not only one but rather a series of disappointing earnings reports PayPal posted over the past year that killed the company’s stock performance.
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