Shares of PayPal Holdings, Inc. (NYSE: PYPL) dropped sharply by more than 20% on Tuesday, erasing nearly $10 billion from its market capitalization during the trading session. The selloff followed a convergence of negative developments, including an unexpected change in top management, a disappointing fourth-quarter earnings report, and a cautious outlook for the coming years.
The abrupt departure of CEO Alex Chriss marked the most startling news. Chriss had occupied the CEO position only since late 2023, making his exit unforeseen for the market and shareholders alike. The company's board of directors announced that Enrique Lores, the current CEO of HP Inc. (NYSE: HPQ), has been chosen to become PayPal’s president and CEO effective March 1, 2026. Until then, Chief Financial Officer Jamie Miller will serve as interim CEO.
During PayPal’s Tuesday earnings call, Miller addressed the surprise leadership upheaval. He attributed the board’s decision primarily to execution challenges, noting that the company’s performance improvement efforts had been slower than desired. “The board’s decision is based on execution … our execution is just too slow,” Miller explained, pointing to the board’s frustration over the pace of progress on planned initiatives.
PayPal’s financial results for the holiday quarter deepened concerns. Growth in Branded Checkout, the company’s core payment button, decelerated to just 1%, a significant slowdown compared to previous quarterly increases of 5% to 6%. This reduction signals potentially intensifying competition from digital wallets such as Apple Pay and Google Pay, which appear to be gaining ground.
Moreover, PayPal revised its earnings guidance for fiscal 2026 downward, forecasting either a single-digit decline or slight growth, thus reflecting subdued expectations. The company also withdrew any projections for fiscal 2027, signaling uncertainty about longer-term performance targets. “Following our fourth quarter performance, we need to prove that out in the coming quarters and years … But given everything I’ve outlined, we are no longer committing to the specific outlook for 2027,” Miller stated on the call.
The steep stock price decline Tuesday pushed shares to trade near historical lows, according to real-time market data. However, interim CEO Miller expressed guarded optimism about PayPal’s future, emphasizing confidence in the incoming CEO’s capabilities. He noted that Enrique Lores would emphasize operational efficiency and prioritize crucial strategic initiatives upon his arrival. “As Enrique steps into the CEO role, he will bring additional operational focus and discipline to priorities underway and together with the right assets, strategy, and team in place, we believe PayPal Holdings, Inc. is well positioned for 2026 and beyond,” Miller commented.
This combination of management disruption, weakened sales momentum, and shrunk forecasts presents significant challenges for PayPal as it seeks to regain investor confidence and competitive positioning in a rapidly evolving digital payments landscape.