Elliott's reported stake in PayPal looks (P)interesting
Elliott Management, which reportedly owns a stake in Pinterest, is now said to be building a stake in PayPal, too. Coincidence?
Why it matters: Elliott is the largest and most active of the activist hedge funds, and it often pushes companies to explore a deal to boost shareholder value. Elliot's PayPal stake could indeed be driven by an M&A plan.
Yes, but: The PayPal details are scant. The WSJ and other news outlets have reported the stake, without citing the actual size. It's likely under 5%, given PayPal's market cap ($99 billion) but we'll find out details shortly, no doubt through a letter or further media leakage.
Context: Earlier this month, news hit that Elliott recently bought 9% of Pinterest. That's the same company that PayPal was in talks to buy in the fall, until PayPal shareholders revolted, and the company abandoned its pursuit.
- Our colleague Kerry Flynn examined potential deal scenarios for Pinterest, with PayPal included on that list.
Of note: Elliott plans to push the company to speed up its cost cutting, per Bloomberg.
What we're watching: This type of high profile tech investment — and potential corporate marriage — has Jesse Cohn written all over. That's Elliott's managing partner and experienced activist campaign maestro, who has a long track record of investing in TMT companies that eventually pursue some kind of deal.
- PayPal and Elliott did not immediate respond to requests seeking comment.