Most people know PayPal from their experience in online shopping, but not everyone is aware of the sheer scale, and global reach, of PayPal Holdings, Inc. Founded in 1998 as ‘Confinity’ by a group of investors including Peter Thiel, the company launched its money transfer service the following year. The early history of PayPal includes some of the biggest names in Silicon Valley – both Thiel and Elon Musk first shot to prominence due to their involvement in the company, which quickly thrived despite the hostile background of the dot-com crisis.
Rebranded under the current name in 2001, PayPal went public in 2002 with a valuation of $800 million. Later on that year, it was acquired entirely by eBay for $1.5 billion, a merger which continued until 2015 when PayPal again became an independent company after pressure from its activist investors. Since then, PayPal has continued to grow organically and via acquisition to become the 134th largest American company by overall revenue, and is highly profitable, booking multi-billion annual profits year on year.
PayPal can boast over 400 million active accounts, distributed worldwide across 200 countries, and continues to innovate in its product offerings. PayPal expanded into offering consumer credit with its ‘Buy Now, Pay Later’ offering, and since January 2021 is the only foreign firm with 100% control over a Chinese payments platform. PayPal has also made significant inroads into the cryptocurrency space via its mobile payments subsidiary Venmo. Lockdowns in many of PayPal’s markets saw growth in the ecommerce sector, which was reflected in record transaction volumes. The company now employs over 26,000 employees in 31 countries.
PayPal’s initial IPO in 2002 at $13 per share was repeated on the NASDAQ exchange in 2015 at $41.46 when it spun out from eBay, instantly becoming a larger company than the parent group. Since then, the stock has performed strongly, and PayPal reached a valuation of $272 billion in November 2021. Major institutional investors control a large portion of shares, particularly Vanguard and Blackrock.
Buying PayPal shares is simple – just log in to SaxoInvestor, SaxoTraderGO or SaxoTraderPRO, and search using the ticker ‘PYPL’. If you don’t have an account yet, you can create one here.
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Currently, PayPal does not pay dividends to investors. Like many technology companies, PayPal reinvests its earnings into the company for growth and expansion into new ventures.
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