PayPal stock surges as pledge to turn
Business
The company's shares closed nearly 7% higher at $55.06 on Thursday
(Reuters) - PayPal Holdings added nearly $4 billion to its market value after a pledge to turn "leaner" fired up investors, even as the payments giant disclosed a subpoena from the U.S. Securities and Exchange Commission tied to its stable coin.
The company's shares closed nearly 7% higher at $55.06 on Thursday as a strong full-year profit forecast also calmed market jitters about a spending slowdown.
"Simply put, our cost base remains too high," the company's new CEO, Alex Chriss, said on Wednesday, adding that PayPal would align its resources to its "most profitable growth priorities."
The upbeat forecast underscored the robustness of consumers' financial health, which has allowed them to keep up with their spending binge even as the economic climate remains uncertain.
"Chriss struck the right note and articulated well the challenges facing the company and described a sound framework for improving growth and profitability," J.P.Morgan analyst Tientsin Huang said.
Brokerage William Blair also said it was "encouraged by management's narrowed focus on profitable growth."
Shares of PayPal's peer Block also climbed to close 7.4% higher.
SEC RAMPS UP PRESSURE ON CRYPTO
The SEC's subpoena indicates that the regulator is keeping up pressure on the cryptocurrency industry despite recently losing a high-profile court case against digital asset manager Grayscale Investments.
PayPal said it was cooperating with the subpoena from the SEC's Enforcement Division, which has asked for the production of documents.
Stablecoins are crypto tokens whose monetary value is pegged to a stable asset to protect potential investors from wild swings in prices.
The company became the first major financial technology firm to embrace digital currencies for payments and transfers when it launched its dollar-backed stablecoin in August.
Separately on Thursday, the company named insider Archie Deskus its new chief technology officer, just a day after a naming Jamie Miller its new finance chief.
