In May, PayPal said it will trade as a standalone company on the Nasdaq stock exchange under the ticker symbol, “PYPL”. Online commerce foe Amazon.com Inc can also be starting to discover in-retailer funds. It was approved by the boards of both companies.
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What Exactly Does Xoom Do? As of yesterday, its shares were up five dollars to $22 per share.
As per the terms of the agreement, PayPal will acquire Xoom for $25 per share in cash or an approximate $890 million.
Schulman highlighted Xoom’s global footprint in 37 countries, hinting at a foothold in developing markets by specifically calling out “Mexico, India, the Philippines, China and Brazil”. Xoom’s quarterly revenues have risen from $39.8 million in the June quarter of a year ago to $44.4 million in the March quarter of 2015.
Is It A Good Deal?
Shareholder rights law firm Johnson & Weaver, LLP has launched an investigation into whether the board members of Xoom Corporation (XOOM) breached their fiduciary duties in connection with the proposed sale of the Company to PayPal, Inc. For Xoom, joining PayPal will help it quickly expand into new markets, while PayPal will strengthen its offering by adding Xoom’s services to its 68 million active United States customers.
Due to anticipated one-time integration costs, the completion of the transaction is expected to be slightly dilutive to PayPal’s non-GAAP earnings for 2016, the company said.
Worldwide peer-to-peer money transfer is an attractive field for financial technology start-ups. The 12-month average target price stands at $29.97, implying upward potential of 2.6% over the trading price of $19.10 in the pre-market trading session.
A Seeking Alpha article points out that Western Union’s stock dip, which ended the day down seven percent, was the lowest for the company since mid-February.
The prospects are enticing companies outside financial services as well.
EBay announced plans to spin off PayPal past year following criticism from activist investor Carl Icahn that slowing growth in the online marketplace was holding back its payments division.
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PayPal is facing increased competition amongst rivals such as Square and Striped, which are popular with small business and Apple Pay.
