Elliott's PayPal plan comes with a variety of scenarios
Elliott Management's reported pursuit of changes at PayPal creates a variety of scenarios. With details still scant, Axios looks at what may come next.
Why it matters: Elliott's size ($50 billion plus in AUM) and expertise (and intensity) means some kind of changes will occur at PayPal (for better or worse) once the ownership stake becomes public.
Of note: Beyond some kind of revived deal scenario around Pinterest, which we discussed yesterday, another outcome could also involve PayPal succession planning.
- Pinterest's new CEO, Bill Ready, is PayPal's former COO and a former Google Pay exec. He's young, experienced in the space, and trying to turn around Pinterest's sagging stock price (down more than 60% since PayPal abandoned its bid for the company last fall).
- PayPal CEO Dan Schulman, in place since 2015, oversaw the payment company's post-pandemic surge to more than $350 billion in market value, and has subsequently overseen its plunge back to a market worth of $90 billion.
- Research firm Gordon Haskett noted yesterday that Schulman is nearly 65 and PayPal may be seeking a new CEO, and that person could be Ready.
Yes, but: Another scenario is that Elliott is there to make sure any revival of a PayPal-Pinterest deal is quashed.
Meanwhile: Elliott's plan may in fact be operational, focused on cost cuts and efficiencies. The WSJ's Heard on the Street details the operational issues that can be addressed across the board at the company.
The bottom line: Nearly every activist campaign has an M&A thesis attached. If it isn't Pinterest or some other angle that Elliott has up its sleeve, Gordon Haskett has one more possibility: some kind of American Express-PayPal tie-up.