The sudden CEO switcheroo was just the latest spooky thing.
By Wolf Richter for WOLF STREET.
Shares of PayPal plunged 20% on Tuesday, to $41.70, after it reported earnings that missed expectations on a variety of metrics, offered Q1 guidance that disappointed, and did a CEO switcheroo out of the blue: It booted out CEO Alex Chriss “effective as of February 2, 2026,” the company announced in the SEC filing on February 3; and it hired a new CEO, HP CEO Enrique Lores, effective March 1. Criss “will remain an employee of the Company in a non-officer capacity through March 2, 2026 to assist with transition matters,” it said. And CFO Jamie Miller would serve as interim CEO until March 1. All this is kind of spooky. But PayPal has been a spooky stock for a while.
The stock [PYPL] has now collapsed by 86% from its goofball meme-stock all-time high of $308.53 on July 23, 2021, and thereby has made it into our pantheon of Imploded Stocks, for which the minimum requirement is a plunge of at least 70% from the more or less recent all-time high.
PayPal had two public listings: Its original IPO in 2002, six months after which it was acquired by eBay. Then in 2015, eBay spun off PayPal and it has been independent ever since. So it’s that second round as a public company that we’re looking at here. The stock market is full of these kinds of crazy charts documenting the meme-stock mentality:
The company has had rising revenues year-after-year for years, and substantial profits that it extracted from each transaction via its substantial fees. It’s not like this company will suddenly keel over or anything. But it does have some challenges beyond the goofballs that drove up its shares to $308 by July 2021.
PayPal, the legacy digital payments service, has a lot of competition in the digital payments space these days, including Apple Pay, Google Pay, Amazon Pay, Shopify Payments, Zelle, Stripe, Square, Wise, Payoneer, Skrill, Klarna, Buy-Now-Pay-Later (BNPL) providers that have invaded ecommerce checkouts, and others.
PayPal’s revenues are largely from fees deducted from the amounts the recipient receives ($4.0 billion in Q4), and from the interest it earns on its customer balances ($3.7 billion). The transaction fees are a mix of fixed fees and a percentage of the transaction amount. For small merchants, those fees add up.
Peer-to-peer payments system Zelle is an increasingly strong competitor. It charges no fees to either party. Zelle is owned by Early Warning Services, which is owned by a consortium of banks. The service is integrated into online bank accounts, and most bank customers in the US have access to it in their online bank accounts. Transfers are instant and free. But it cannot be used for international transactions. And ecommerce sites don’t offer Zelle at the checkout.
Zelle processed 3.6 billion transactions in 2024, totaling over $1 trillion, up by 27% from 2023. In the first half of 2025, it processed 2 billion transactions, totaling $600 billion, up by 23% year-over-year. Payments to small businesses – such as WOLF STREET for donations – increased by 31% to 180 million transactions in the first half of 2025.
Compared to Zelle’s growth rates, PayPal’s growth rate of “total payment volume” was a lame 7% in its just reported year 2025.
Zelle’s no-fee feature is hard to beat. And it has been eating into PayPal’s transactions.
So PayPal also expanded through acquisitions, including these major ones:
In 2013, it acquired peer-to-peer mobile payments app Venmo as part of the $800 million purchase of Braintree. In 2015, it acquired digital money transfer company Xoom for $1 billion. In 2018, it acquired iZettle, a Swedish payments processor, for $2.2 billion. In 2020, it acquired tech company Honey for $4 billion, which operates a browser extension that automatically applies online coupons on ecommerce websites, and that has gotten tangled up in all kinds of allegations and lawsuits. In 2021, PayPal acquired Japanese BNPL app Plaidy for $2.7 billion. If your competition eats your lunch, buy your competition.
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“If your competition eats your lunch, buy your competition”
That hasn’t worked too well for HP and INTC
They’re all doing it.
PayPal been around a longtime (5 years to implode). Gave many people confidence in internet purchasing. Not a very sexy industry – paying bills etc. Ever since govworks? documentary trying to take a cut to pay a bill, I still pay old fashioned way. Bank t/f.
> and it hired a new CEO
That’s often a positive
> So PayPal also expanded through acquisitions
Not a bad plan if the company generates strong free cash flows and has low debt, which it surprisingly does. On paper, the company appears healthy and stable financially. Good execution could stabilize it by using existing cash flows to secure new growth vehicles and mitigate cash-flow erosion.
Of the many imploded stocks, this one seems more hopeful. At least for investors who buy it when it’s in the dumps and not heights.
> That hasn’t worked too well for HP
Lows to highs during last 5 years shows reasonable returns. Don’t think a bargain investor would be disappointed with HP over this time frame. If you hold stocks till death do you part than sure, it’s a terrible pick.
Wouldn’t touch PP with 10 ft pole after they froze my account for 6 month for one misspell of my last name happened 20 years ago.
Tbh, I think PayPal will be fine.
Younger generations love it.
They increase their revenues by about 3 billion a year.
I thought PayPal was for boomers, it’s been around since the 1990s. Young people use Apple Pay or whatever.
Their buy now pay later just seems a little sketchy to my cynical self. Then again who knows? Also their ceo sudden change without a heads up could be good but didn’t the new ceo come from a stalled hp? That’s gotta inspire copious amounts of confidence does it not?😂
I got wacked on this one trying to bottom fish. There might be other shoes to drop here. Caveat emptor.