Ebay and PayPal: better off alone

Ebay and Paypal are splitting into separate entities – a divorce that is expected to make tech investors happy.

Shares in the newly spun-off PayPal will be listed on New York’s NASDAQ exchange from Monday (20 July).

Ebay bought the digital payment service for 1.5 billion dollars in 2012, but PayPal is now the bigger and stronger of the two.

Analyst Scott Kessler, of S&P Capital,
said he believes Ebay “suddenly is going to be a much slower growth company and I think you could perhaps see some folks taking a greater interest in PayPal, the publicly-traded company, than Ebay.”

Ebay is facing touch competition from Amazon and other online retailers that have eaten up much of the market share lost by high street shops.

Despite long being Ebay’s fastest growing segment, PayPal will have challenges of its own – competing with the rise of rival mobile payment systems, particularly from Apple and Google.