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6 Things You Didn't Know About PayPal Holdings, Inc.

By Daniel Sparks – Jul 14, 2017 at 8:21PM

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A peek into the PayPal Mafia, how the company has gone public twice, and more. Investors shouldn't overlook this information about PayPal and its history.

PayPal (PYPL -1.66%) stock has been a hot performer in 2017. Year to date, shares are up an impressive 45%, trouncing the S&P 500's 10% return during the same period. The soaring stock price has brought the stock a lot of attention.

As PayPal stock continues to turn heads, here's a close look at some facts about the company that some investors may not be familiar with.

1. Its founders and early star employees are referred to as the "PayPal Mafia."

PayPal's early years benefited from some of the most brilliant individuals in Silicon Valley. Some founders and early lead employees, including Peter Thiel, Elon Musk, Reid Hoffman, Luke Nosek, and Ken Howery, have since become billionaires. Furthermore, names from the "PayPal Mafia" went on to help start Tesla, SpaceX, LinkedIn, Palantir Technologies, YouTube, and Yelp, among others.

PayPal headquarters

Image source: PayPal.

2. PayPal acquired Braintree in 2013.

While it was still owned by eBay (EBAY -1.94%), PayPal paid about $800 million in cash to acquire Braintree. The company is considered an all-in-one payments partner for business payment solutions. Braintree boasts merchants in over 40 countries.

3. PayPal is still growing rapidly.

Since splitting off from eBay in 2015, PayPal is still growing fast. For instance, in PayPal's most recent quarter, revenue increased 17% year over year, handily outpacing its former parent eBay, which posted 4% year-over-year revenue growth during the same period. 

PayPal's recent growth has been primarily driven by an 11% year-over-year increase in active accounts and a steadily increasing rate in the number of payment transactions per active account. 

4. PayPal has gone public twice.

PayPal first went public in 2002. But after PayPal rose to prominence as the default payment option on eBay, the online marketplace company acquired PayPal in 2002 in a deal valued at about $1.5 billion of eBay stock. Then the two companies became separate again when eBay spun off PayPal in 2015. 

5. Since its 2015 public offering, PayPal stock has soared.

It would be difficult to argue that eBay's decision to spin off PayPal wasn't an excellent decision. The move has unlocked massive shareholder value, with both stocks skyrocketing since the spinoff.

PYPL Chart

PYPL data by YCharts.

Since its July 20, 2015, public offering, PayPal stock is up about 56% and eBay stock is up about 43%.

Customer and merchant using Square's payment solutions

Image source: Square.

6. PayPal is far bigger than Square.

While Square (SQ -4.18%) may be the trendy new kid on the block in the payments and fintech space (especially after Square's late 2015 IPO), eBay is still the giant in the industry. Driving this point home, consider that PayPal's first-quarter payment volume was $99 billion, yet Square's was just $13.6 billion. 

Sure, Square is the faster-growing company of the two when measured by gross payment volume. Square's payment volume was up 33% year over year in the first quarter, while eBay's was up 25%. But Square is far from catching up to PayPal.

As these facts show, PayPal is a far-reaching juggernaut in the mobile and online payments space. As it continues to benefit from rapid growth, the company looks well positioned to maintain its leading role for years to come.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool owns shares of and recommends eBay and PayPal Holdings. The Motley Fool owns shares of Square. The Motley Fool has a disclosure policy.

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