PayPal gives downbeat earnings forecast, shares plunge

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PayPal Holdings Inc on Tuesday forecast first-quarter revenue and profit well below expectations, as it prepares to take a hit from eBay Inc's ongoing move to ditch its payments services, sending its shares down 17.4%.

PayPal's operating agreement with eBay has ended and the online marketplace's transition to its own payments platform is impacting transaction volumes.

After spending more than a decade under eBay's fold, PayPal was spun out of the e-commerce marketplace operator in 2015. "Many of these stocks have been pushed up for years and have had very high valuations, so once they start to show cracks investors bail." PayPal processed a total of $340 billion in payments in the quarter, up 23% from a year earlier, while its peer-to-peer payment service Venmo processed a total of about $61 billion in payments.

 

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