PayPal Holdings, Inc. (PYPL): A Bull Case Theory

Core Thesis - PayPal Holdings, Inc. is experiencing a bullish sentiment driven by share buybacks and a reduction in share count, enhancing shareholder value and ownership per share [1][6]. Share Count and Market Capitalization - PayPal's share count has decreased by approximately 13% from 1.098 billion shares in 2023 to 955 million shares in 2025, coinciding with a share price increase from $60 to $67.66, resulting in a market capitalization of $64.61 billion compared to $65.88 billion in 2023 [2]. Shareholder Value Enhancement - The reduction in shares means each dollar invested now represents a larger ownership stake, creating more value per share. PayPal repurchased 41 million shares at an average cost of $72.42, yielding 3.7% relative to the total company [3][4]. Efficiency of Buyback Program - The same number of shares repurchased in 2025 at a similar price generated a 4.3% yield due to the smaller share base, indicating a compounding benefit from the buyback strategy. Lower stock-based compensation (SBC) has also contributed, decreasing from $768 million in 2022 to $573 million in 2025 [4][5]. Long-term Strategy and Monitoring - If the current strategy of buybacks and reduced dilution continues, it could lead to improved returns for investors without increasing overall buyback spending. Monitoring the execution of this strategy will be crucial for long-term shareholder value creation [5]. Hedge Fund Interest - PayPal is not among the 30 most popular stocks among hedge funds, with 89 hedge fund portfolios holding PYPL at the end of Q2, down from 92 in the previous quarter [7].