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TIVP030: PAYPAL (PYPL): VALUE TRAP OR MULTIBAGGER?
W/ DANIEL MAHNCKE & SHAWN O’MALLEY
27 July 2025
Daniel Mahncke and Shawn O’Malley dive into PayPal’s post-pandemic reset, tracing the fintech pioneer’s slide from market darling to value-story candidate. Once lifted by lockdown spending and eBay tailwinds, PayPal has seen its growth stall, its take-rate decline, and investors seem to have given up on it. In this episode, Shawn and Daniel unpack whether new CEO Alex Chriss’s “profitable growth” playbook, Fastlane one-click checkout, a margin-focused Braintree overhaul, and fresh bets on Ads and the PYUSD stablecoin, can restore momentum.
They also debate how realistic PayPal’s ambitious goals for the future are, what a sustained 6% share shrink via buybacks does for long-term EPS, how the new management team is incentivized, and whether PayPal’s consumer moat still matters in an Apple-Pay world. Along the way, they examine the broader payments landscape, from Stripe’s enterprise push to Visa’s sticky network tolls, and weigh how regulatory shifts around stablecoins and open banking could reshape the economics for everyone in the stack.
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IN THIS EPISODE, YOU’LL LEARN:
- How PayPal became the No.1 payment provider and what the PayPal Mafia is.
- Why investors fell out of love with PayPal’s stock.
- What the next chapter under the new CEO will look like.
- Which new businesses could make PayPal dramatically more profitable?
- How the new strategy shows up in the numbers.
- Why the management incentive structure is a big benefit for shareholders.
- Whether stablecoins are bearish or bullish for PayPal.
- Whether PayPal is attractively valued at its current levels.
- Whether Shawn & Daniel add PYPL to The Intrinsic Value Portfolio.
- And much, much more!
TRANSCRIPT
Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.
[00:00:00] Daniel Mahncke: I think PayPal’s time as a value trap is over. Alex Chriss’s strategy shift shows first signs of success. Margins improved significantly. PayPal is buying back shares at the fastest rate ever, and we are at the early innings of an ads empire and a giant in commerce.
[00:00:18] Shawn O’Malley: You might be right, and when the B2B restructuring is done and top line growth kicks up again, investors might start viewing this as what it is a cash flowing machine in a fast-growing oligopoly.
[00:00:30] Daniel Mahncke: And while investors wait, the aggressive share buybacks increase their stake in the business. And I think it might be PayPal’s time now.
[00:00:44] Intro: You are listening to The Intrinsic Value Podcast by The Investor’s Podcast Network. Since 2014 with over 180 million downloads, we’ve learned directly from the world’s best investors. Now we are applying those lessons to analyze businesses and investment opportunities every week, helping you uncover intrinsic value. And now here are your hosts, Shawn O’Malley and Daniel Mahncke.
[00:01:16] Shawn O’Malley: Today we have another company that has seen better days, but it’s not in decline like some of our last few pitches actually, it might just be starting a new growth spurt. And of course, I’m talking about PayPal. Once one of the most admired FinTech companies in the world, it is now a stock that has declined by more than 75% from its peak.
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BOOKS AND RESOURCES
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- Emerging Value Substack Article.
- Crossroad’s Interview with Alex Chriss.
- PayPal 2025 Investor Day.
- The Reservist Article on the Payment Industry.
- Jimmy Soni’s Book on The PayPal Mafia.
- Explore our previous Intrinsic Value breakdowns: Uber, Nike, Reddit, Nintendo, Airbnb, AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
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