Interested in investing in Paypal stock? Before taking the plunge, read this to find out everything you need to know
A widely-recognized online payment player, the American company PayPal is listed on the NASDAQ stock exchange. The company owns a payment platform that serves as an alternative to checks and credit cards.
The system allows users to pay on e-commerce sites, to bid on auctions, to make transfers between individuals or professionals and enables transactions of sales and purchases online.
Since going public in 2002, the company has attracted many investors. Here’s a full analysis that will enable you to better understand the company's success.
Initially named Confinity when it was founded in 1998, PayPal specialized in the development of security software for mobile devices. It expanded its offering in 1999 with a money transfer service. The company was renamed PayPal in 2001 and went public in 2002. It was bought by eBay the same year.
In 2014, eBay's decision to spin off PayPal was put into effect. Since then, the company has increased acquisitions and strategic partnerships to expand its array of offerings.
PayPal differentiates itself by its easy-to-use and easy-to-access service. Using an email address and a password, users can access a PayPal account. He or she can then choose their source of supply such as a credit card or bank account.
PayPal is a partner of Mastercard & Visa, Samsung, Aon and Europ Assistance. The company competes with services from Amazon Pay, Apple Pay and Android Pay.
The company's market capitalization reached 123,267 million in October 2019. It generated more than $16 million in revenue in the same year. More than half of this figure comes from its US operations. The UK market accounts for less than 15% of its revenue.
PayPal went public in 2002, with its shares listed at $13 per share. It was purchased by eBay at nearly $23 per share. In 2014, the company was reintroduced to the stock market with a price of $37 per share. This price has been moving fairly steadily, varying between the IPO price and a peak of $44.15 reached in October 2016.
The 2020 pandemic positively influenced PayPal's business, as the service limits direct human interaction while enabling trade. The evolution of the global health and economic situation in the wake of the crisis may continue to have an impact on the share price.
The potential development of digital currencies in the coming years is profitable for PayPal. As one of the major players in the sector, it will be able to take advantage of the development and stay ahead of the competition.
However, there are a few things to watch out for if you decide to invest in PayPal. The restrictive policies of some states limit its international coverage, such as the case of China and Japan. The company is also facing the multiplication of companies offering e-wallets.
Transaction security is appreciated by a majority of the customers and a great asset for PayPal, whose international reputation is reassuring for the public. The service currently has more than 150 million users worldwide. The company also offers an international payment service with more than 20 currencies available.
The biggest threat to PayPal's stock is the reluctance of users because of the risks associated with fraud, added to confidentiality and data protection issues that the company is currently attempting to solve.