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PayPal had just lost 200 billion in 8 month
After the closing bell on february first, twenty twenty two pay pal cfo at john rainey, forecasted that do drove a variety of hurdles and the challenges investors should be more cautious about their short term future of pay pal. Usually such an announcement may cause a five or seven percent decline after hours, but to pay pal stock tumble to eighteen percent after hours. At this point, executives and investors likely hope that a new trading day would be much kinder to pay pal and that that fear would subside, but on february second losses just to continue to compound and to pay pal, it would end up posting their worst a trading day ever losing it painful at twenty four present. Since then, pay pal has continued to bleed it falling a total of thirty percent. Now this decline itself would be considered a bear market, given that this whole office more than twenty percent, but this is just the most recent of pay, pal's losses since the end of july. It all stock has cracked a total of sixty percent, which correlates to over two hundred billion dollar loss in market cap. Clearly, pathos dog is experiencing a mini depression. So what happened to pay pal, taking a look back, one of pathos biggest shortfalls, was that you were never able to achieve a sustainable operation by themselves. Like many startups pay pal had a rough time turning a profit in the early days, but despite their lack of profitability, they did have millions of customers earth thanks to the rapid adoption of the internet, focusing on customers as opposed to profits, wasn't perfectly fine throughout the late nineteen nineties, as it was pretty easy to source funding, especially for a rapidly growing tech company. But all of this would have change at the turn of the millennium, with the birth of the dot com bubble by two thousand and one, it was clear that pay pal needed to focus on profitability if they wanted to survive, but their c e o. U on mosque, seem to be distracted, you don't want wanted to go pay pal it into a comprehensive, a platform it in transition to servers from linux to microsoft. While these ambitions may have been best for the company long term and the other executives felt that you was forgetting about the main priority which was turning a profit, so while you let was on vacation, then they decided to go ahead and fire him and peter thiel would take over this shift at a company company's folk as in the right direction, but they still had a long way to go. Ebay had announced a partnership with wells fargo to launch their own in house payment system called the bill point and the given that sixty one percent of pay pal's revenue came from ebay. This was not good by any means. In fact it this extreme dependence on ebay was the primary reason that both of google and yahoo refused. Apart pay pal. The only company willing to acquire pay pal was ebay, but they had a pretty predatory offer. They offer to four hundred million dollars and set a court. We are going to make this offer once and then crush you. You should really take that offer. Considering days peter decided to throw a hail mary by taking paypal, public.
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