Scalper1 News
Silicon Valley tech giants Apple ( AAPL ), Facebook ( FB ) and Alphabet ‘s ( GOOGL ) Google are likely to begin acquiring payments firms, with PayPal ( PYPL ) among the possible targets, investment bank Wedbush said after polling what it termed a panel of experts. The shopping spree will be sparked by slowing industry growth and “capital markets back at higher valuations,” Wedbush analyst Gil Luria wrote in a research note Monday. The panel told Wedbush that Google would be the best fit to acquire PayPal. Luria, however, disagreed with the panel, writing that he believes MasterCard ( MA ) would gain more value from a PayPal acquisition. PayPal stock was up 4%, near 41, in late-afternoon trading on the stock market today . The IBD Leaderboard stock cleared a 40.03 buy point early Monday. The stock has an IBD Composite Rating of 94, where 99 is the highest. Wedbush panelists included a former senior vice president at PayPal, as well as executives with credit card companies including MasterCard. On Sunday, PayPal announced that it would be opening up its money-transfer service Xoom to Cuba. The announcement coincided with President Obama’s historic trip to the island nation. Square Not Likely To Be Acquired The report dismissed Square ( SQ ) as a potential acquisition target until it can attract more than just “small-ticket merchants,” Luria cited the panelists as saying. Luria speculated that Visa ( V ) would unload its approximately 1% stake in Square vs. acquiring more. Earlier this month, Square posted its first quarterly earnings reports since its November IPO. Results met Wall Street expectations, but slowing merchant growth led to a disappointing outlook . Square stock rose to a 2016 high on Monday, up 10% near 13, in late-afternoon trading. The gains came with no apparent news. In an email, Luria told IBD, “Square is very heavily shorted with a very small float — that has translated into significant volatility in the share price, including today.” The float will rise in less than two months: The IPO lockup period for insiders and major venture capital investors expires May 17. The panelists said that if Square’s lending business continues to grow at 200% to 300%, it will likely “end badly.” Square Capital provides cash advances to some of Square’s small-merchant customers. But Square Capital is essentially a subprime lender, Luria has told IBD. Scalper1 News
Scalper1 News