Updated from July 17 to include PayPal opening price.
PayPal started trading on the NASDAQ on Monday under the ticker "PYPL," returning to its roots with the same ticker it traded under before being acquired in 2002. Each eBay shareholder received one share of PayPal common stock per eBay share.
"When-issued" trading (trading before a stock is available to buy on the open market) began on July 6, giving us a better idea for the valuation of PayPal as a standalone company. PayPal was trading around $38.63 in the "when-issued" market, valuing PayPal at $47 billion. Shares of eBay in the "ex-distribution" market were trading around $27.02, well below what the company traded for when PayPal was factored into the equation.
Now that PayPal is trading on the open market, we can get a more accurate valuation for the two companies. PayPal shares opened up 6% higher on Monday, trading at $40.60, while eBay shares opened at $26.89.
For those who did not already own eBay pre-spinoff, the question is now whether you should buy PayPal, eBay, or both. If you already owned eBay, the question becomes, should you sell PayPal, eBay, or both.
In terms of PayPal, the price may be a bit expensive right now, according to Wedbush analyst Gil Luria, who advised getting in on the stock if it were priced between $45-40. Luria believes that PayPal should trade on a similar trajectory to Visa (V) and MasterCard (MA).