Elliott Investment Management, an activist investor, has reportedly been building a stake in PayPal (NASDAQ:PYPL). It seems the investor wants PayPal to ramp up its cost-reduction efforts. Wall Street apparently approves of this development, as PYPL stock is moving higher today.
PayPal hasn’t had a great 2022 so far. The payment processor has dealt with supply chain constraints and rising inflation, both of which have created problems for e-commerce in general. Just maybe, it’s time for PayPal to make some changes in order to adapt to these challenges.
In that vein, Elliott Investment Management has, according to a recent Bloomberg report, been building up a stake in PayPal. The Wall Street Journal also noted Elliott’s stake in the company. Neither source specified the size of that stake.
Is Elliott Investment Management just wagering PayPal shares will increase in value? Not likely, as Bloomberg cited “people familiar with the matter” in reporting Elliott plans to push for PayPal to accelerate its cost-reduction efforts. These efforts, evidently, include firing workers and closing down offices.
What’s Happening With PYPL Stock?
This morning, PYPL stock was up 8%. Granted, all of the major stock market indices were up at that time, including the Nasdaq. Still, PayPal shares were up more than many other tech-centered names. On the other hand, the stock has a lot of catching up to do, as it was worth $300 just a year ago.
Going forward, investors should expect to hear a lot more about Elliott Investment Management and its influence on PayPal. Bloomberg‘s sources claimed Elliott might ultimately become one of PayPal’s five largest shareholders.
Also, Elliott is led by Paul Singer, a billionaire who has apparently agitated some of the world’s biggest companies. Lately, he’s been wielding his influence to agitate PayPal — but today’s traders seem to think that’s not necessarily a bad thing at all.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
