PayPal Holdings (NASDAQ:PYPL) stock was down 6% as of 1:19 p.m. ET on Monday after a reaction over a new policy change. In comparison, the S&P 500 index was down more than 1% early this afternoon before rising.
PayPal has apparently changed its policy to charge customers $2,500 for distributing “misinformation.” The business said that it is not fining consumers for incorrect information and has never planned to do so.
The bad press comes as PayPal struggles to recapture its mojo after reporting declining growth in the previous year. Year to date, the stock has dropped 55%. The issue is whether this occurrence will have any long-term influence on the brand.
So, What Happened to PayPal Stock?
This may seem to be a small incident, but it may be difficult to predict the effect of negative news on a business. However, the current stock sell-off seems to reflect market performance rather than business performance. As the larger market began to rise in the early afternoon, PayPal followed suit.
PayPal stock has plunged significantly more than the Nasdaq Composite’s 33% year-to-date slump. Today’s rise is consistent with the stock’s customary big swings relative to market volatility; thus, determining how much of today’s move is caused by the policy update response is challenging.
So, what now?
PayPal is such a well-known service that this is unlikely to harm its reputation. PayPal had 429 million active customer accounts at the end of the second quarter, up from 181 million in 2015. It has expanded significantly and has become a vital payment app for millions worldwide. Furthermore, the organization did well to react swiftly in order to eliminate the misunderstanding by delivering a correction before it snowballed out of hand.
Nonetheless, this incident may increase the relevance of the company’s next earnings report and projection for the following quarter. Analysts now estimate PayPal will announce full-year revenue of $27.8 billion, reflecting a 9.7% increase over 2021.
Featured Image – Megapixl © Prykhodov
Author Okoro Chinedu 
