While the majority of Wall Street cheered a strong earnings report from PayPal Holdings Inc., investors in EBay Inc. saw another side to the story, and it wasn’t pretty.
EBay shares fell to their lowest levels in almost two years after PayPal, which processes payments for the Internet retailer, reported “ongoing pressure” and slower growth in the business.
Stifel analyst Scott Devitt cut his rating on EBay to hold from buy, saying PayPal’s results suggested weak gross merchandise volume trends for EBay in the third quarter.
“There is significant asset value in eBay long-term,” Devitt wrote in a note to clients. “But we think the negative fundamental story may play out for some time before an investor is paid for asset value.”
EBay was Friday’s worst performer in the S&P 500 Index. The shares fell 8.7 percent at 11:23 a.m. in New York to their lowest levels since December 2016. The company is due to report its own third-quarter results on Oct. 30.