Adverse eBay outcome
PYPL fell ~11% a/h on news that it will lose its eBay merchant of record (MoR) and processing contract after its agreement expires in 2020. Our initial estimate is that the changes could see a low to mid-teens impact on 2021 EPS, all else equal. PYPL argued its medium term guidance can absorb this and highlighted it now has greater flexibility to work with other marketplaces, but the a/h reaction looks appropriate to us given the EPS impact. Elsewhere, PYPL's momentum remains impressive.PayPal Holdings is a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. The company's combined payment solutions include its PayPal, PayPal Credit, Braintree, Venmo, Xoom and iZettle products and services. PayPal's payment solutions enable the company's customers to send and receive payments. PayPal helps merchants and consumers connect, transact, and complete payments, whether they are online, on a mobile device, in an app, or in person. The company provides proprietary payment solutions accepted by merchants that enable the completion of payments on the company's Payments Platform on behalf of its customers.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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