PayPal Shares Plunged 86% From the 2021 Goofball High and Right Into Our Imploded Stocks
•February 4, 2026
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Why It Matters
The leadership shake‑up and earnings disappointment signal deeper challenges in PayPal’s core payments business, raising doubts about its ability to sustain growth amid fee‑free competition. Investors and the broader fintech sector will watch how the new CEO addresses margin pressure and strategic positioning.
Key Takeaways
- •PayPal shares down 86% from 2021 peak.
- •New CEO Enrique Lores from HP appointed March 1.
- •Q4 revenue miss and weak TPV growth 7% cited.
- •Zelle’s fee‑free growth eroding PayPal transaction volume.
- •Aggressive acquisition spree totals over $10 billion.
Pulse Analysis
PayPal’s precipitous stock slide reflects more than a single earnings miss; it underscores a broader market correction of the hype that propelled the company to meme‑stock status in 2021. The abrupt CEO transition, with HP veteran Enrique Lores taking the helm, adds a governance dimension that investors scrutinize for strategic clarity. While the Q4 report showed solid fee revenue, the 7% total payment volume growth lagged behind industry peers, prompting analysts to question the sustainability of PayPal’s profit engine.
The competitive landscape has shifted dramatically as fee‑free alternatives such as Zelle gain traction. Zelle’s integration into major banks and its rapid transaction volume expansion—up 27% year‑over‑year—offers consumers a costless, instant option that directly chips away at PayPal’s merchant fee base. This pressure is compounded by the rise of BNPL services, digital wallets, and embedded payments from tech giants, forcing PayPal to defend market share on both price and user experience fronts.
Strategically, PayPal faces a crossroads. Its past acquisition spree, exceeding $10 billion across Venmo, Xoom, iZettle, Honey, and Plaidy, aimed to diversify revenue streams but has not fully offset the erosion of core transaction volumes. The new leadership must decide whether to double down on integration, pursue new high‑margin services, or explore partnerships that can counter fee‑free rivals. The next earnings cycle will reveal if Lores can revitalize growth, restore investor confidence, and reposition PayPal as a resilient player in the evolving digital payments ecosystem.
PayPal Shares Plunged 86% from the 2021 Goofball High and Right into our Imploded Stocks
The sudden CEO switcheroo was just the latest spooky thing.
By Wolf Richter for WOLF STREET.
Shares of PayPal plunged 20% on Tuesday, to $41.70, after it reported earnings that missed expectations on a variety of metrics, offered Q1 guidance that disappointed, and did a CEO switcheroo out of the blue: It booted out CEO Alex Chriss “effective as of February 2, 2026,” the company announced in the SEC filing on February 3; and it hired a new CEO, HP CEO Enrique Lores, effective March 1. Chriss “will remain an employee of the Company in a non‑officer capacity through March 2, 2026 to assist with transition matters,” it said. And CFO Jamie Miller would serve as interim CEO until March 1. All this is kind of spooky. But PayPal has been a spooky stock for a while.
The stock PYPL has now collapsed by 86% from its goofball meme‑stock all‑time high of $308.53 on July 23, 2021, and thereby has made it into our pantheon of Imploded Stocks, for which the minimum requirement is a plunge of at least 70% from the more or less recent all‑time high.
PayPal had two public listings: Its original IPO in 2002, six months after which it was acquired by eBay. Then in 2015, eBay spun off PayPal and it has been independent ever since. So it’s that second round as a public company that we’re looking at here. The stock market is full of these kinds of crazy charts documenting the meme‑stock mentality:
![Image 1: Line chart of PayPal [PYPL] stock from 2016 to 2026, showing a peak in 2021 and a subsequent decline of 86%](https://wolfstreet.com/wp-content/uploads/2026/02/US-stocks-paypal-02-03-2026.png)
The company has had rising revenues year‑after‑year for years, and substantial profits that it extracted from each transaction via its substantial fees. It’s not like this company will suddenly keel over or anything. But it does have some challenges beyond the goofballs that drove up its shares to $308 by July 2021.
PayPal, the legacy digital payments service, has a lot of competition in the digital payments space these days, including Apple Pay, Google Pay, Amazon Pay, Shopify Payments (Shop Pay), Zelle, Stripe, Square, Wise, Payoneer, Skrill, Klarna, Buy‑Now‑Pay‑Later (BNPL) providers that have invaded ecommerce checkouts, and others.
PayPal’s revenues are largely from fees deducted from the amounts the recipient receives ($4.0 billion in Q4), and from the interest it earns on its customer balances ($3.7 billion). The transaction fees are a mix of fixed fees and a percentage of the transaction amount. For small merchants, those fees add up.
Peer‑to‑peer payments system Zelle is an increasingly strong competitor. It charges no fees to either party. Zelle is owned by Early Warning Services, which is owned by a consortium of banks. The service is integrated into online bank accounts, and most bank customers in the US have access to it in their online bank accounts. Transfers are instant and free. But it cannot be used for international transactions. And ecommerce sites don’t offer Zelle at the checkout.
Zelle processed 3.6 billion transactions in 2024, totaling over $1 trillion, up by 27% from 2023. In the first half of 2025, it processed 2 billion transactions, totaling $600 billion, up by 23% year‑over‑year. Payments to small businesses – such as WOLF STREET for donations – increased by 31% to 180 million transactions in the first half of 2025.
Compared to Zelle’s growth rates, PayPal’s growth rate of “total payment volume” was a lame 7% in its just‑reported year 2025.
Zelle’s no‑fee feature is hard to beat. And it has been eating into PayPal’s transactions.
So PayPal also expanded through acquisitions, including these major ones:
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In 2013, it acquired peer‑to‑peer mobile payments app Venmo as part of the $800 million purchase of Braintree.
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In 2015, it acquired digital money transfer company Xoom for $1 billion.
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In 2018, it acquired iZettle, a Swedish payments processor, for $2.2 billion.
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In 2020, it acquired tech company Honey for $4 billion, which operates a browser extension that automatically applies online coupons on ecommerce websites, and that has gotten tangled up in all kinds of allegations and lawsuits.
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In 2021, PayPal acquired Japanese BNPL app Plaidy for $2.7 billion.
If your competition eats your lunch, buy your competition.
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