The move would come amid growing efforts by banking and payments companies -- ranging from Square SQ to Goldman Sachs GS -- to boost their personal finance offerings and capitalize on a surge in retail investing sparked in part by Robinhood (HOOD) - Get Robinhood Markets, Inc. Class A Report and its no-fee trading offerings.
San Jose-based PayPal, which began as a payments company, is now also seeking to establish itself as a one-stop shop for personal finance.
PayPal recently hired an experienced brokerage hand, Rich Hagen, for the project, , CNBC reported, citing knowledgeable sources. Hagen was previously president at Ally Invest. In his new role, he’s chief executive of Invest at PayPal, according to his LinkedIn page.
The company could start its own securities brokerage, cooperate with an existing firm, or buy one. It already has talked to possible industry partners, one of the sources said. CNBC reported it’s unlikely PayPal will begin a stock trading platform this year
PayPal recently traded at $287.15, up 3%. The stock has risen only 5% in the last six months amid concern about valuation and industry competition.
Morningstar analyst Brett Horn increased his fair value estimate for PayPal to $147 from $139 last week.
“In recent years, PayPal’s growth has remained turbocharged by the ongoing shift toward electronic payments and the rise of e-commerce,” Horn wrote in a commentary.
“In the near term, few payments companies are as well-positioned as PayPal. Longer term, though, the picture is less clear, and we see a mix of competitive opportunities and threats that create a fairly wide range of outcomes.”