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Top tech investor reveals why he thinks PayPal is a buy

It has been a good month for PayPal . The financial services firm reported stronger-than-expected second-quarter results and a renowned fund management firm revealed a stake in the company. Top tech investor Paul Meeks shares why he thinks the stock is a buying opportunity. “PayPal unfortunately suffers from what I call self-inflicted wounds. They have given guidance, quarter by quarter, over the last few years and missed their own guidance miserably. The company has a reputation of not being tightly managed,” Meeks, portfolio manager at Independent Solutions Wealth Management, told CNBC Pro Talks last week. But the company’s second-quarter earnings report was a “nice positive surprise,” and has reignited his interest in the stock. PayPal posted adjusted earnings per share (EPS) of 93 cents for the second quarter, beating the consensus estimate of 86 cents per share, according to Refinitiv. The company also raised its forecast for adjusted EPS for the full year. The company also delivered a beat on revenue and announced projected cost savings of $900 million this year. “I’m starting to become more intrigued because they’ve shown that they’ve regained some credibility. I think PayPal could be a buy here,” Meeks said. PayPal’s colorful history PayPal’s reputation as one of the largest online payment processors in the world belies its relatively brief history. The company was born of a merger i n 2000 between online bank X.com, a company founded by Tesla CEO Elon Musk, and software company Confinity. Musk had a brief stint as CEO of the merged company between April 2000 and October 2000. PayPal was acquired by e-commerce giant eBay in 2002 for $1.5 billion, before being spun off as a separate entity in 2015. Read more Have markets hit the bottom? Strategist reveals the indicators to watch closely as stocks rally Is ‘super cheap’ Meta a buy or a miss? Here’s what top tech investor Paul Meeks says Tesla’s valuation doesn’t make sense until it hits this level, fund manager says The company marked a new chapter in its colorful history earlier in this month, when it announced in its second-quarter earnings presentation that it had entered into an information-sharing agreement on value creation with Elliott Management. “As one of PayPal’s largest investors, with an approximately $2 billion investment, Elliott strongly believes in the value proposition at PayPal,” Elliott managing partner Jesse Cohn was quoted as saying in the presentation . Meeks said he believes that Elliot’s stake in PayPal lends “some credence” to the latter’s investment thesis, given Elliot’s reputation as a “crackerjack activist investor.” The news came just a day after Elliott said it had become the top investor in social network operator Pinterest . But Meeks said he has “more confidence” in PayPal and would “still stay away,” from Pinterest given the changing landscape in social media. Shares in PayPal closed at around $102 on Tuesday. The stock is still down nearly 50% this year, despite rallying nearly 40% over the past one month.

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