PayPal value hits $50 billion on market debut

PayPal value hits $50 billion on market debut

Shares in PayPal rose around five per cent on its first morning of trading back on the Nasdaq following its separation from eBay, valuing the firm at around $50 billion, considerably more than its former parent.

PayPal's shares hit a high of $41.63 before settling back to $40.30, up from Friday's close of $38.35 when shares were trading on a "when issued" basis. Meanwhile, eBay shares held steady at $28.21, valuing the online marketplace at around $33 billion.

Founded by Peter Thiel, Elon Musk and others in the late 1990s, PayPal went public in 2002 before being snapped up by eBay in the same year for $1.5 billion. The split decision comes after activist investor Carl Icahn began agitated for a spin-off, arguing that that the auction site was hampering the growth and competitiveness of its payments subsidiary.

PayPal has 169 million active users and processed $235 billion in total payment volume and generated more than $8 billion in revenues last year. The firm claims that it is well-positioned to take advantage of the coming mobile money revolution in which it will battle the likes of Visa, MasterCard, Google, Apple, Stripe and a host of startups.

Dan Schulman, president and CEO, PayPal, says: "Mobile technology is transforming payments, making it easier, safer and more affordable for people to move and manage their money than ever before. As an independent company, we see a tremendous opportunity for PayPal to expand our role as a champion for consumers and partner to merchants, and to help shape the industry as money becomes digital at an increasingly rapid pace."

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