top line
Shares in payments giant PayPal had their worst day on record — plummeting about 25% — after the company released disappointing sales and earnings guidance for 2022, citing factors including higher inflation affecting consumer spending.
PayPal plummeted 25% as investors sold off stocks.
Important facts
PayPal’s stock plunged nearly 25% to just under $133 per share after a disappointing outlook — its lowest since May 2020, a far cry from its record high of $360 per share last year.
The stock price plunge is PayPal’s fastest drop ever, wiping out roughly $50 billion in market value on Wednesday alone.
PayPal reported mixed fourth-quarter results late Tuesday, but what really spooked investors was the company’s weak earnings guidance, with executives admitting a number of factors will weigh on the business in 2022.
The payments company lowered its earnings guidance for the current quarter and cut full-year revenue growth forecasts to 15% to 17%, down from the 18% expected by analysts.
PayPal, which has seen slower user growth, cited several challenges that will impact results this year, including the impact of higher inflation on consumer spending and ongoing supply chain issues.
The company is also losing business faster than expected from one of its biggest customers and former owners, eBay, which is in the process of transitioning to its own separate payments platform.