Free At Last
PayPal's (NASDAQ:PYPL) first steps as a public company were shaky. At first, the company was giddy. Then, after a series of daily declines, the company finally found some footing. eBay's (NASDAQ:EBAY) spinoff of PayPal is more aptly seen as PayPal's spinoff of eBay. It's only logical, seeing as PayPal's out-of-the-gate market cap of $45 billion is roughly 30% higher than eBay's market cap of $34 billion. The true spinoff-ee aside, the two companies are keeping close relations. eBay and PayPal have vowed to better protect buyers by continuing to share information regarding transactions. The bottom line is that after their breakup, eBay and PayPal are still friends. And this is important. In 2014, eBay was the source of more than 30% of PayPal's revenues, and helped drive a host of new PayPal members. With that said, PayPal is beginning to "play the field," if you will. More than two-thirds of the largest 100 online retailers in the U.S. accept PayPal. In fact, PayPal's sales recently surpassed eBay's. I think we are able to say, with confidence, who wore the pants in the relationship.
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