updated - June 4, 2020 Thursday EDT
Online payment platform Paypal Holdings Inc. is set to make its return to the Nasdaq on Monday with a market value larger than its parent company eBay Inc.
Bloomberg reported that Paypal will be valued at around $46 billion compared to eBay's $34 billion, as investors have a more favourable outlook for Paypal as it faces less competition than the online retailer.
Reuters, however, reported Paypal also faces a crowded field with startups as well as more established tech players such as Apple offering a challenge. The report said Paypal will likely partner with some rivals to shore up its position.
PayPal Ceo Dan Schulman also told Reuters that the company is even looking to compete with other money transfer companies like Western Union. Schulman said there is a potential for Paypal to expand to basic financial services from just being a conduit for commerce.
Citing analysts from J.P Morgan, Reuters reported that Paypal remains the leader in among online payment service providers with over 160 million active accounts, global reach and brand recognition.
Bloomberg, meanwhile, noted that Paypal processed 1.1 billion transactions in the second quarter alone, higher by more than a quarter form last year. It added that people's shift to online shopping will likely fuel the company's continued growth.
Although the growth prospects of Paypal is better, Bloomberg said that Ebay is currently more profitable despite seeing a decline a 2 percent decline in merchandise volume.
PayPal was founded in the late 1990s and was acquired by eBay for $1.5 billion soon after its debut in 2002. However, Ebay decided to spin off Paypal after public pressure from billionaire investor Carl Icahn, who said the full potential of Paypal is locked while it remains as a unit of the online retail giant .
Ebay said the spinoff will give both companies more flexibility and allow each to focus on their respective businesses.
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