Shares in online payments facilitator PayPal dropped the most in more than a year after volume from former parent eBay tumbled and the payments giant lowered its guidance for revenue and earnings.
Transactions tied to eBay’s marketplace slid 45% in the third quarter, a bigger decline than in the previous three months, PayPal said.
PayPal, which is a big multinational employer in Ireland with nearly 3,000 staff stationed here, has been battling the loss of eBay ever since the two decided to end their longtime partnership in 2018.
PayPal chief executive Dan Schulman called eBay’s impact on results a temporary problem, and he pointed to a new agreement with Amazon.com as more indicative of PayPal’s fortunes going forward.
“eBay results are like a pig through the python right now,” Mr Schulman said.
Teaming up with major e-commerce firms such as Amazon “are of a much more permanent nature”.
PayPal said it had inked a deal with Amazon to allow the firm’s Venmo wallets, in the US, to be accepted on Amazon’s website and mobile app starting next year.
PayPal shares dropped 11% to $204.20, the biggest intraday decline since September of last year. They’re down 11% this year.
The eBay effect weighed on overall payments volume, which climbed just 26% to $310bn (€268bn), a smaller increase than analysts predicted.
PayPal now expects revenue to climb just 18% to $25.3bn-$25.4bn for the year.
The company had previously forecast a 20% jump. Total payments volume is now expected to increase by as much as 34% while adjusted earnings per share is forecast to rise 19% to $4.60.
PayPal announced recently that it isn’t pursuing an acquisition of Pinterest, ending speculation over a potential $45bn deal between the two companies. With Pinterest’s visual-search and scrapbooking platform, PayPal could have gained more data about the products consumers are buying.
- Bloomberg and Irish Examiner