PayPal Shares Slide Following CEO Announcement and Weak Results
PayPal Stock: PayPal Holdings Inc. shares dropped sharply after the company announced a leadership change and reported fourth-quarter results that came in below analyst estimates.
The payments firm said HP Inc. Chief Executive Officer Enrique Lores will take over as chief executive, replacing Alex Chriss. Jamie Miller, PayPal’s chief financial and operating officer, will serve as interim CEO until Lores assumes the role on March 1.
The stock tumbled as much as 19%, marking its biggest intraday decline in more than four years. The selloff followed both the CEO announcement and a separate earnings statement showing profit and revenue missed expectations.
Chriss, who became CEO in 2023 after succeeding longtime chief executive Dan Schulman, had outlined a turnaround strategy focused on profitability and PayPal’s branded checkout experience. However, the company failed to meet revised earnings targets after twice raising guidance.
Executives said they can no longer commit to previous forecasts for the coming year. Full-year earnings per share were reported at $5.31, below the $5.35 to $5.39 range the company projected in October.
Newly appointed independent board chair David Dorman said that while some progress had been made, execution did not meet the board’s expectations.
Jamie Miller said during a conference call that the company had not moved fast enough or with sufficient focus. She will lead the firm on an interim basis until the leadership transition is completed.
For the fourth quarter, PayPal reported earnings per share of $1.23 and revenue of $8.68 billion, both below analyst estimates. Growth in PayPal-branded online checkouts slowed to 1%, down from 6% a year earlier.
The company also pointed to weakness in US retail spending and international headwinds as factors weighing on performance.
Analysts reacted cautiously to the timing of the management change. Evercore ISI analyst Adam Frisch said investors are questioning whether the new CEO will assemble a strong payments team to pursue another turnaround or consider strategic alternatives.
Lores brings decades of experience from HP, where he rose from an engineering intern to CEO in 2019. During his tenure, he guided the company through challenging PC and printer markets and navigated a failed takeover attempt by Xerox Holdings Corp.
At HP, Lores oversaw shifts in the company’s global supply chain, expanding production in Vietnam, Thailand, India, Mexico, and the US while reducing reliance on China.
Meanwhile, HP said board member Bruce Broussard has been appointed interim CEO as the company begins a search for Lores’ replacement.
PayPal also disclosed that full-year 2026 transaction margin dollars are expected to show a slight decline from the prior year. During the fourth quarter, the company applied to become a US bank with regulators, a move aimed at expanding its small-business lending capabilities.
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