PayPal Holdings Inc. had offered a deal for online-discount platform Honey with a $4-billion price tag. According to the analysts, PayPal will be squeezing out the value from the Honey by making the consumers understand its worth, increasing international distribution, and enhancing customer engagement. Honey’s browser extension is known to help customers find deals on products that they want to purchase. On November 21, 2019, the stocks of PayPal had reached up to 0.4%. Almost 90% of the Honey users are found to be active every month. Thus, PayPal has high hopes to have its usage doubled if Honey could possibly help increase consumer compatibility before any purchases.
The catalyst-based offers—wherein 40% of e-commerce is driven by purchase—and the product discovery versus a single checkout payment are the two engines of PayPal. PayPal could escalate its shares with a $120 target. The Honey purchase could help the digital payment pioneer become more relevant and add extra tools for both merchants and customers. The customer engagement and purchase volume will skyrocket with Honey assets. Within the next 6–12 Months, the inclusion of Honey’s capabilities into PayPal is believed to help attract Venmo users. Honey users include almost 79% women and millennials. Other than the money, the acquisition is predicted to help PayPal increase its e-commerce market share. The digital payment giant plans to appear at the start and end of the shopping journey in order to make a greater share of checkout and be more evident on the app. As per the enterprise-value-to-sales ratio, this deal is rich. PayPal shares have escalated to 23% this year while the S&P 500 soared up to 24%.
In a similar context, PayPal Holdings Inc.’s CEO Dan Schulman has stated they plan to divorce Facebook Inc’s Libra cryptocurrency project but will still continue to keep an eye on Libra’s growth and look for opportunities to work together in the future. As the blockchain technology is intriguing, the digital payment pioneer plans to look for a broader consumer base as they urge to be unique. The cryptocurrencies are too volatile and there is time for it to replace actual cash. PayPal has a team striving on an in-house unnamed cryptocurrency and blockchain technology project. For now, the company has declared that it only owns bitcoins.