Elliott Investment Management is holding discussions with PayPal Holdings over an agreement that would see the activist investor have a hand in determining the future direction of the company, according to people familiar with the matter.
Talks between Elliott and PayPal are amicable and could result in the activist investor getting representation on the board, the people said, asking not to be identified because the matter is private. An agreement could be announced in the coming days, they said. The talks are ongoing and could still fall apart, they added.
Representatives for PayPal and Elliott declined to comment.
PayPal has been cutting staff and closing offices as it looks to cut expenses. Elliott, which has
PayPal rose more than 11% in trading Wednesday after reports of Elliott’s investment. The stock was trading at $85.79 as of 12:30 p.m. in New York, giving the company a market value of about $99 billion.
The company is set to report quarterly results on Aug. 2.
PayPal has been facing supply-chain disruptions and once-in-a-generation levels of inflation that have hindered e-commerce, while more consumers have been returning to in-store shopping. All the while, eBay, PayPal’s former parent company, has been rapidly moving payments away from its platform.
That’s forced PayPal Chief Executive Dan Schulman to rejigger plans for the year as he seeks to improve operating leverage — or the ability to grow revenue faster than expenses.
PayPal has warned it will incur an additional $100 million in restructuring charges this year, though job cuts will ultimately help the firm save about $260 million a year in employee-related costs. Florida-based Elliott, led by the billionaire Paul Singer, has agitated at some of the world’s largest and most prominent companies, including Toshiba, GSK and AT&T, in recent years.
