In a notable turn of events, three executives from PayPal have recently sold off substantial shares of the company, coinciding with a significant downturn in stock prices that has followed the release of their third-quarter earnings report on October 28.
Chris Natali, PayPal’s chief accounting officer, was the first among the executives to make a move, offloading 1,374 shares on October 30 at a selling price of $69.13 each, resulting in a total transaction value nearing $95,000. Following this sale, Natali has no direct holdings left in PayPal.
Suzan Kereere, the president of global markets, followed suit on November 3 with two separate transactions. Kereere sold 10,000 shares at an average price of $68.85 and an additional 2,500 shares for $68.96, accumulating a total of $860,900 from these sales. Post-transactions, she retains 30,983 shares, valued at approximately $1.9 million based on the closing price of $62.81 on Friday.
On November 10, Aaron Webster, who serves as the global chief risk officer, executed three sales totaling 9,282 shares, netting about $615,309. Webster still holds a substantial stake, with 35,699 shares worth over $2.2 million as of the recent closing price.
The frequency of these stock sales amidst a 26% drop in PayPal’s stock value this year raises eyebrows. In stark contrast, the S&P 500 index has enjoyed a notable uptick of more than 14% over the same period. Since the October 28 earnings report, PayPal’s share price has dwindled by an alarming 14%.
The current valuation of PayPal shares is a significant drop from its peak at $308.53, reached on July 23, 2021, highlighting the company’s struggles in maintaining investor confidence.
Alex Chriss, who assumed the role of CEO in 2023, has introduced a turnaround strategy aimed at phasing out low-margin and unbranded business operations. However, the market’s reaction remains tepid.
Despite reporting solid earnings that beat analyst expectations—$8.29 billion in revenue and earnings per share of $1.40—investors remain concerned about PayPal’s competitive edge. Analysts are increasingly seeking tangible improvements in the company’s online growth metrics to validate their investments.
The decline can be partially attributed to insufficient transaction margin dollars, which represent the profit made from each transaction after costs, a vital metric that has come under scrutiny. The drop translated into an 8% decrease in stock price immediately following the earnings announcement.
CNBC’s Jim Cramer recently opined that while having a competent CEO is crucial, it has yet to translate into positive stock performance. He urged Chriss to focus on delivering stronger financial outcomes.
Amidst the broader fintech landscape, results have been mixed. Competitor Affirm Holdings has enjoyed a 16% increase this year while Block has seen a sharp decline of 29%. PayPal shares closed at $62.81 on Friday, presenting an uncertain outlook for the company in the competitive market.
