Elliott Investment Management Drops Stake in PayPal

Elliott Investment Management L.P. has reportedly sold its stake in PayPal Holdings Inc. during the second quarter, according to a recent filing. The firm, founded by Paul Singer, did not include a position in PayPal in its latest 13-F filing, which covered holdings as of the end of the second quarter. This is a significant change from the first quarter when Elliott owned 1 million PayPal shares worth approximately $76 million.

Wall Street Reacts to Elliott Stake in PayPal

Rumors of an Elliott stake in PayPal began circulating in July 2022, and both parties confirmed it shortly after PayPal's next earnings report. In the statement released by PayPal in August 2022, Elliott Managing Partner Jesse Cohn expressed confidence in PayPal's future success: "PayPal has an unmatched and industry-leading footprint across its payments businesses and a right to win over the near and long term."

During PayPal's earnings call at the time, CEO Dan Schulman emphasized their alignment with Elliott: "We are completely aligned in our mutual goal to maximize shareholder value, and we are substantially aligned on the areas of focus for achieving our objectives."

No Immediate Comment from Elliott

Elliott has not provided any comment regarding their decision to exit the PayPal position. While PayPal continues to undergo changes, including cost-cutting measures and a leadership shift, Elliott seems to be exploring other opportunities in the financial-services space.

PayPal Shares Drop, Elliott Invests in Fidelity National Information Services

Following the news of Elliott's exit from PayPal, the stock experienced a 4% decline in Tuesday afternoon trading. However, on Monday, when the CEO announcement was made, PayPal's stock rose by almost 3%. Over the past year, the stock has seen a decline of approximately 40%.

Meanwhile, Elliott has revealed a new investment strategy by taking a fresh position in Fidelity National Information Services Inc. The firm now holds approximately 1.1 million shares of Fidelity National, valued at nearly $60 million as of the end of the second quarter.

Conclusion

The decision by Elliott Investment Management L.P. to sell its stake in PayPal Holdings Inc. has surprised many in the industry. Despite their previous alignment on maximizing shareholder value, Elliott's exit suggests that they see other opportunities in the financial-services sector. As PayPal undergoes transformations and prepares for a new CEO, the market will closely watch their future performance.