Benzinga - by Zaheer Anwari, Benzinga Contributor.
- Recent market activity has pushed PayPal's stock downwards, now hovering around the August 2017 level at $58, dangerously close to the crucial $50 psychological support.
- Adding to investor apprehensions, PayPal, in cooperation with The Financial Conduct Authority (FCA), has paused cryptocurrency purchases for UK users from October 1st, 2023, until early 2024, a move that might induce more fluctuations in its stock price.
Once a powerful presence in the stock market, the company's ongoing struggle with dropping stock prices raises significant concerns about its ability to bounce back.
PayPal's stock experienced a significant decline between July 2021 and June 2022. The value of the stock dropped by a staggering 78%, falling from $310 to $67.
This decline effectively erased the gains made over several years, bringing the stock price back to its October 2017 level.
While many businesses and stocks struggled during the global pandemic, PayPal was able to thrive.
The lockdown period led to a surge in online shopping as physical stores became inaccessible, and PayPal benefited greatly from this shift in lifestyle.
Its stock saw a significant increase of 113% as more people turned to digital avenues for their shopping needs. However, this positive trend was short-lived.
In May 2023, the stock price experienced significant volatility, fluctuating between $67 and $100.
Unfortunately, the stock took another blow, eventually dropping below $67, which had been holding strong up until then.
Although there was a slight bullish momentum in the following two months, it was unable to be sustained.
The increased activity of sellers has led to afurther decline's in PayPal's stock price, bringing it back to levels last seen in August 2017, currently trading at $58.
This development is concerning, as the stock is approaching a significant milestone, $50 psychological support.
The market has faced various difficulties, including many stocks undergoing corrections. However, PayPal's struggles are particularly noteworthy.
The stock is already plummeting, and breaking the fall has proven to be a significant challenge for the company.
PayPal's recent announcement about its operations in the UK may cause further concerns amongst investors. Starting from October 1st, 2023, UK-based PayPal customers will no longer be able to purchase cryptocurrencies through the platform, at least until early 2024.
This decision, made as they work with The Financial Conduct Authority (FCA), is to ensure better consumer protection, but it could have a unpredictable effect on the stock price.
The regulations in place regarding crypto advertising to British consumers are strict, and as a result, there could be some turbulent times ahead.
In the event that the stock price drops below $50, there is a possibility that the decline will only intensify before ultimately reaching any level of stability.
After the closing bell on Thursday, August 17, the stock closed at $58.60, trading down by 1.81%.
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