Carl Icahn Slashes PayPal Stake 70%

Icahn helped split company from eBay

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Aug 15, 2017
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Carl Icahn (Trades, Portfolio) slashed his holding of PayPal (PYPL, Financial), a company he helped separate from eBay (EBAY, Financial), after shrinking it for several previous quarters, he announced via a portfolio update Monday.

Icahn, an activist investor, received one share of PayPal for each share of eBay stock he held as part of the spin-off in July 2015. As a result, at the end of the third quarter 2015, he held the same amount of PayPal stock, 46,271,370 shares, that he had held of eBay, which he sold out.

Icahn, eBay’s largest shareholder, drove the company’s split off by adding a board member from his company, Icahn Capital, in January 2015.

PayPal’s stock stagnated from the spin-off through 2016, but changed course in the past year. PayPal has climbed 55% over the past 12 months and 51% year to date, to $59.69 per share at close Tuesday.

In the second quarter, PayPal reported an 18% increase in revenue year over year to $3.14 billion and 27% rise in earnings per share to 34 cents. The growth came on the back of an 80% increase in net new customer account additions to 6.5 million and a 23% increase in transactions to 1.8 billion.

“Our strong results reflect PayPal’s transformation from a single product to a platform company, from a vendor to a strategic partner to both merchants and ecosystem players, and from a checkout option to an increasingly more central way for consumers to manage and move their money,” PayPal President and CEO Dan Schulman said in a release.

The payments company also expanded its strategic partnerships over the quarter, including with Baidu, Bank of America, Citi, JPMorgan Chase and others.

Icahn had been trimming the position since the first quarter 2016 as the price increased, though the second quarter marked the largest reduction, by 63.3%, or 21,574,653 shares. The sell dropped PayPal to 2.74% of his stock portfolio, from 6.81% in the previous quarter.

Shares of eBay have advanced 14% over the past 12 months and 18.7% year to date, to $35.25 per share Tuesday.

See Carl Icahn (Trades, Portfolio)’s portfolio here.