What's going on at PayPal?

A Deep Dive into the Selloff, the Strategy, and the Insider Moves

PayPal has been one of the most dramatic tech re-ratings of the past few years. The stock is still down ~80% from its highs, and investors keep asking: What actually happened? Why is sentiment so bad? And is the turnaround real?

I've been asked by a couple Flankers and people on YouTube to study the stock, so here’s a breakdown of what’s been weighing on the stock, what management is trying to fix, and why insiders selling has become part of the story.

Why the stock collapsed

A few big forces converged... from my research, I think there's four main reasons:

a) Growth slowed hard

PayPal’s pandemic surge reversed. E-commerce growth normalized, user growth stalled, and branded checkout (the PayPal button) began losing share to Apple Pay, Shopify, and other integrated payment flows.

b) Competitive pressure intensified

The “checkout wars” have become brutal. Apple Pay (with Touch ID + Face ID), Google Pay, Shopify Payments, Stripe, and even Amazon Pay are attacking PayPal’s highest-margin product: the checkout button.

This is critical because branded checkout drives ~80% of PayPal’s transaction margin dollars.

When the hyper-scalers are coming for, it's VERY hard to defend against them

c) Margin dilution from the wrong growth

Over the last few years, PayPal chased unprofitable volume—low-margin processing deals that padded TPV but hurt profitability.

The new CEO (Alex Chriss) is intentionally shrinking low-margin volume to refocus on earnings.

Great for margins, bad for headline growth. Markets hate that tradeoff.

d) Sentiment cratered

After multiple “false starts” from prior management teams, Wall Street stopped giving them the benefit of the doubt. When growth slows AND the narrative breaks, multiples compress fast.

What PayPal is trying to do now — the turnaround strategy

This is the part investors need to watch closely.

a) Shift toward higher-margin revenue

Chriss is killing low-margin deals and pushing the business toward:

branded checkout
Braintree’s profitable merchant relationships
higher-margin PayPal consumer activity
buy-now-pay-later (BNPL)
PayPal’s stablecoin (PYUSD)

This intentionally lowers TPV growth while lifting EPS.

b) Rebuild the core checkout experience

Checkout speed and conversion have historically lagged. Management is rolling out:

a new one-click checkout design
faster login flows
better merchant integrations
AI-powered fraud tools

If PayPal can meaningfully improve conversion, merchants will care.

c) Cost discipline

PayPal has been aggressively cutting costs, including large layoffs and consolidation of product lines. This is helping EPS even while growth is muted.

d) Capital returns

PayPal is using cash flow for buybacks (~$6B), signaling confidence that the equity is undervalued.

4. What could make the stock re-rate

For PayPal to regain investor trust, it needs to show:

Stabilizing branded checkout share (the biggest signal)
Sustained margin expansion from the mix shift
EPS growth in the low-teens or better
Clear product wins that differentiate PayPal from Apple/Google
Stronger merchant adoption of the new checkout stack
Any insider buying (even small) would be a sentiment catalyst

If they execute, this can absolutely be a classic “good business that got over-sold.”
If they don’t, PayPal risks drifting into maturity like eBay or Western Union...

I also tried looking for a moat in Paypal. Other than network moats, I couldn't find one. I think the hyperscalers are coming for blood, and PayPal's defenses seem lacking.

Sentiment: "Too-hard"