Full Disclosure
I started buying Paypal around $59 I am long leaps. I Added 6 Figures in Paypal leaps today.I already owned a bunch of leaps before from $59 lows.
—Paypal dropped -16% in the last 2 days on nothing but strong earnings & deferred FCF which I think had retail selling which is at record high vol and algos via professionals selling.
—Currently it's at 2017 valuations yet they have 250 million more customers, 100 million less shares, They are bringing in +$14.5 Billion dollars more revenue per year at $27.5B and estimated to bring in upwards of $40 Billion into 2026.
—Lower prices means they can buy back 7% of the company $5B this year and will do the same in 2024+
—73% of the entire float is owned by Institutions.
—New Ceo this winter.
—Record summer & winter earnings with deferred $1.2 Billion FCF added to an already $1B+ Q3 or 4 they will be using to buyback shares.
—Their Bonds are looking strong, $640M senior notes Japan recently….
—668 funds that owned it Jan 2022 and sold could come back.
—New funds investing, Ray Dalio, RtLLC,
—High dark pool Institutional vol after hrs many days sometimes over 19% of daily average vol.
—Large share buybacks $4.1B 12Mt Lower prices =More shares, they cut some fat in BNPL to add more than $1 billion in buybacks.
—So I do use paypal a lot for my business and have since early 2000s. Spending thousands in fee's a year or more , that are well spent…
—Works the best for safe overseas transactions that nobody imo can compete with especially in some of the billion people nations.
—Users will continue to grow overseas especially currently about 43%.— One reason earnings have been choppy was usd vs the other currencies as usd was dominating the last 9 months or so. They sold some BNPL from Europe and FCF will shift to Q3 or Q4.
—$5.1 Billion FCF Trailing 12m
—Non-Transaction Operating Expenses declined 12% which is very nice to see. Cost saving helped Meta run just mentioning it could help.
—I am not worried about competition in the space, there is plenty of room for growth and paypal still has it's moat regardless of what you hear. Apple pay , Google pay etc have been around for years… Do a google trends search of all three worldwide.
—Paypal owns Braintree which is actually a partner with Apple Pay, Charge hound , Happy Returns, Honey, Hyperwallet , Paidy, Simility, Venmo, Xoom, and Zettle.
—As a recession hits paypal will be the go to place for people in the gig economy and starting up businesses.
—paypal owns many companies like Venmo etc which are growing rapidly and will do well in hard times as they have in the past.
—I believe they can really boost ROE a lot more with those billions especially buying back 7% of the company at low prices. They can buy back 7% of the company today for $5b if you go back to 2021 valuations this is a gain of $20 billion dollars for a worth of $25 billion dollars for the $5 billion in shares or 80.5M they can buy back . Major shareholder value in a couple years.
— FED Now is NOT replacing paypal- It's actually bullish long term and expands the market here is why- Paypal to me is not a U.S. play, its international and as the internet via starlink opens doors to billions of more people there will be 100s of millions of new customers for paypal. Competition is good. Also if you ever worked in the government you know that it's not going to work right for years…
—This market has hammered many of the biggest stock like META and AMAZON the last year that saw -25% draw down overnight too which is now up 260% since I last covered it here on Reddit like this.
Stocks can move fast in this market.
TLDR: Bullish Paypal and believe it could pull a meta type move over the next 12-18 months because of it's valuation currently, its international growth potential and new management. I have Leaps.
Cheers
Leave a Reply