Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, October 3, 2014

Article Excerpt

EBAY INC., $54.44, Nasdaq symbol EBAY, plans to spin off its PayPal subsidiary as a separate company. This business processes online transactions, including purchases made through eBay’s auction websites. In the past few years, PayPal has expanded into retail stores and payments through smartphones. It accounts for about 40% of eBay’s revenue. eBay plans to hand out PayPal shares as a special dividend in the second half of 2015. Investors are not liable for capital gains taxes until they sell their new shares. As a separate firm, PayPal will be able to form partnerships with eBay competitors like Amazon.com and Chinese e-commerce company Alibaba. That will help it fend off new entrants in the online payments industry, like Apple’s new Apple Pay service, which lets users pay for goods and services with their iPhones. As well, PayPal will have no debt, which could make it an attractive takeover target. eBay’s remaining auction and enterprise businesses will keep the company’s $7.5-billion debt, which is equal…