Crypto: PayPal’s Ambitions Could Be Crushed By A Powerful Player

PayPal’s crypto offering could be facing its last days if activist hedge fund Elliott Management has its say.

The hedge fund recently took a stake in the beleaguered payments behemoth, according to the Wall Street Journal. The amount of the stake and what Elliott paid was not disclosed.

Elliott could encourage PayPal to eliminate its crypto offering that was launched in 2021.

One reason that Elliott was drawn to the payments company is that it has $8 billion of cash and short-term investments. 

Activist investors often want the management team of companies to be more aggressive in how they distribute a cash reserve.

The hedge fund could wind up one of the five largest shareholders of PayPal, according to a Bloomberg report. 

PayPal launched its crypto platform in early 2021, allowing people to invest in bitcoin, ethereum, litecoin and bitcoin cash. Its consumer payments app Venmo also launched the ability to own crypto in April 2021.

Instead of spending time on cryptocurrencies, PayPal should focus on its main offering of providing payment transactions which is profitable, said Dan Dolev, an analyst at Mizuho Securities. 

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