PYPL Preps Venmo For Sale? Gordon Haskett Sees Spinoff Or Takeover Ahead

• The mobile payments app will soon reportedly be its own standalone segment within PayPal.
• Gordon Haskett said that it is "worth adding" that Bloomberg reported two months ago that PayPal was drawing takeover looks. 
• According to the firm, it is likely that the decision to separate Venmo might have evolved from discussions with bidders.

PayPal’s (PYPL) decision to spin off Venmo as a standalone business could foreshadow a sale or a spinoff, according to Gordon Haskett’s head of event-driven research, Don Bilson.

"Every once in a while, a re-segmenting move like this will foreshadow a sale or a spinoff," according to the research firm, which adds that PayPal "now goes on our breakup watchlist."

The comment comes on the heels of a CNBC report from Wednesday that said PayPal is considering separating Venmo as a standalone business. PayPal CEO Enrique Lores reportedly told managers that he is reorganizing the firm’s reporting lines for this purpose.

The mobile payments app will soon reportedly be its own standalone segment within PayPal. Besides Venmo, PayPal will have two other segments, one a PayPal-branded business for merchants and consumers, and a payment services unit, the report said.

What Does Haskett Think?

Gordon Haskett said that it is "worth adding" that Bloomberg reported two months ago that PayPal was drawing takeover looks and contends that it is "possible, we suppose, that this Venmo idea has evolved from the discussions that Lores and the board have had with folks who approached the company in February."

Haskett was referring to a February report from Bloomberg, which stated that PayPal’s rival Stripe is considering acquiring all or parts of PayPal.  

How Did PYPL Retail Traders React?

On Stocktwits, retail sentiment around PYPL stock rose from ‘bearish’ to ‘neutral’ territory over the past 24 hours, while message volume increased from ‘low’ to ‘high’ levels. According to platform data, retail chatter around PYPL has increased by over 600% over the past day.

A Stocktwits user said that they are now awaiting the company’s first-quarter earnings report, slated for next week.

Another user opined that the recent news indicates a buyout is in the works for PayPal.

PYPL stock has fallen 24% over the past 12 months.

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