PayPal's Growth Story

Motley Fool Hidden Gems Investing

The Motley Fool

Business, Investing

4.3 • 3.1K Ratings

🗓️ 20 June 2023

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

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Summary

DraftKings wants to consolidate the sports betting market, but it still has a long road to profitability. (00:14) Ricky Mulvey and Nick Sciple discuss:-PayPal selling off more than $40 billion of buy now, pay later loans. -The payment processor's capital allocation strategy. -The DraftKings bid to buy a rival operator. -Why sports betting companies have a customer stickiness problem. Plus, (12:20) Alison Southwick and Robert Brokamp answer listener questions about 401(k)s, investing, and cash management. Companies/tickers mentioned: PYPL, KKR, AFRM, DKNG, TQQQ "Women Power Rule Breakers - A Sparks Conversation" event registration https://fool.zoom.us/webinar/register/WN_BbdTqNGmQXKbWOx_zlb7bw#/registration Host: Ricky Mulvey Guests: Nick Sciple, Alison Southwick, Robert Brokamp Engineers: Tim Sparks, Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Paypal Sheds Assets While DraftKings doubles down, you're listening
0:09.4	to Motley Full Money.
0:14.6	I'm Ricky Mulvey.
0:15.6	Joining us now is Nick Cypill.
0:17.0	Nick Good to see you.
0:18.0	Great to be back here with you Ricky.
0:19.6	So private equity firm KKR is purchasing up to 40 billion euros of PayPal's Buy Now
0:26.5	pay later loans in Europe.
0:28.8	PayPal's doing this spin off to a private equity giant.
0:32.4	Why are they getting rid of this growth story for them?
0:35.1	Long story short, the Buy Now pay later segment just grew too big, too fast for the company.
0:40.1	PayPal has said in recent years that it's going to remain an asset light company and that
0:45.2	it would sell its credit portfolio if and when the balance sheet became credit heavy because
0:49.9	of the growth of some of these assets.
0:52.0	He looked back to 2016 so that it's consumer credit portfolio to synchrony for about $7
0:57.0	billion think about that.
0:58.0	That's credit cards, things like that.
1:00.3	This year selling off its Buy Now pay later business really seen incredible growth process
1:05.3	more than $20 billion in Buy Now pay later volume globally last year up 160% from 2021 for
1:11.7	context.
1:12.7	That's bigger than a firm who actually that's all they do is Buy Now pay later.
1:16.0	So just incredible growth for PayPal and you know it's but became a weight on the balance
	...

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