Despite the fact that it hasn’t yet split off from parent company eBay, PayPal shares have started trading on a when-issued basis, and are doing brisk business on the markets.
PYPLV shares reached $37.40 yesterday, putting them at a little over 60 percent of the value of eBay shares. That’s despite the fact that PayPal only generated 40 percent of the total sales enjoyed by eBay over the course of last year.
Part of the high valuation can be attributed to PayPal’s considerable rate of growth, with the company having driven up revenue by 19 percent last year, and transaction values rising by 26 percent. But another part of it is prospective; PayPal has been taking a lot of measures to really stake its claim in the digital payment market over the last several months, presumably in anticipation of its branching off from eBay.
And to a great extent, the company has been positioning itself in the mPayment space, a market that is expected to undergo considerable growth as more platforms follow the lead of Apple Pay in getting consumers interested in such services. PayPal recently struck a partnership widely enabling mPayment operations in Australia, and is also expanding its One Touch service to Canada and the UK. It’s widely seen as a serious rival to Apple’s quite successful mPayment platform, and could bank on its brand recognition as it seeks to compete on its own.
Source: Yahoo Finance