PayPal reportedly experienced an increase in market value after committing to become a “leaner” company.
The global payments giant’s shares climbed almost 7% to $55.12 Thursday (Nov. 2), Reuters reported Thursday.
Alex Chriss, PayPal’s new CEO, emphasized Wednesday (Nov. 1) the need to align resources with the company’s most profitable growth priorities and reduce its cost base, the report said.
In an earnings release issued Wednesday, Chriss said: “My first 30 days leading PayPal have confirmed my belief in the company’s strong assets and market position. Now, we must harness these strengths and put the weight of the organization behind our most important priorities.”
This commitment to streamlining operations and focusing on profitability has resonated with investors, who have reacted favorably to the company’s strong full-year profit forecast, per the Reuters report.
Tien-tsin Huang, an analyst at J.P. Morgan, told Reuters that Chriss struck the right note and provided a sound plan for the company’s future. Brokerage firm William Blair also expressed encouragement over management’s “narrowed focus on profitable growth.”
The positive forecast from PayPal reflects the resilience of consumers’ financial health, despite the uncertain economic climate, according to the report.
The subpoena from the SEC indicates that the regulatory body is maintaining pressure on the cryptocurrency sector, the report said. PayPal, which embraced digital currencies for payments and transfers by launching a dollar-backed stablecoin in August, now faces scrutiny from the SEC.
In addition to the positive market response and the SEC subpoena, PayPal has announced internal leadership changes, per the report. Archie Deskus was named the new chief technology officer Thursday, and Jamie Miller was appointed as the new chief financial officer Wednesday.
Chriss said Wednesday during the company’s quarterly earnings call that over 70% of the adults in the United States have used PayPal in the past five years, adding that “with the recent launch of our Venmo Team account, we are now seeing adoption of our core products and services across the entire addressable market in the U.S.”